That Worked Out Well-Said Me Never
Ugh. I really didn't want this to my next post but I'm getting a lot of folks asking about our tiny house, so I guess I can't put it off...and it's been a month so that's fair. So about that tiny house. Remember how I said we had everything figured out and we're doing this and we spit shook on it and everything? Well, long story short: no tiny house for us right now. In the end, it all came down to funding. Which I never even considered because my income is sufficient and my credit is great. As it turns out banks don't like that we don't have a house and you can't see my "housing income" from my company on my W2. Oh, and we haven't had a loan that big before. Uh, duh. It would technically be our first house, of course we haven't had a loan that big before. But you can't tell 'em that. I'll say more about that later.
Okay, so here's the long version:
CHAPTER ONE: The Home and Garden Show
On June 20th - I'll never forget the day - Anaheim hosted a lovely Home and Garden Show. Ryan and I were super stoked about it because Escape Tiny Homes was going to be there and we were going to actually get inside one and get a feel for the space. We were also excited about asking Randy...the owner? builder? I don't know...tons of questions. Well, we finally got Randy cornered and picked his brain...and were instantly disappointed. Randy told us that in order for our tiny home to be RVIA certified it had to be built by a RVIA certified builder - welp, that makes complete sense, why didn't we think of that. We just assumed we could build it "to code" and we would RVIA certify it ourselves. We're dummies. This one bit of information meant two things: first, the price of our tiny home just doubled, if not tripled. Second, we weren't going to get to actually build our house ourselves. I'm not sure if y'all remember, but this moment was exactly 4 hours after I posted the initial blog about our tiny house plans. So much for having our SugarHoneyIceTea together.
CHAPTER TWO: RVIA (Recreational Vehicle Industry Association)
Why is RVIA certification so important? Well, unlike a lot of the people on HGTV, we want to actually travel in our tiny house. Like, not just to the place where we're going to park it for a few years. We're going to be moving every three months and to cities we've never lived in. In order to stay in most RV parks across the US your vehicle must be RVIA certified. Also, in order to get funding, a lot of people get RV loans because it doesn't qualify as a house for mortgage so it must be RVIA certified - and it's darn near impossible to get a personal loans for that much (remember, we can't build it ourselves-instant budget buster). If we still went with building it ourselves it would be exponentially harder to find parking in a new city every three months because you can't just park it anywhere. We would've been at the mercy of craigslist or anyone else who would consider letting us park it in their backyard. Plus, no hookups.
CHAPTER THREE: The Switch
So a couple days after the ill-fated Home and Garden Show that we had to sulk through the rest of, we found our tiny home builder. We were going to use a tiny home builder out of Tennessee that was RVIA certified and priced at half the price of the previous builders we looked at. Score! We got into contact with the builder, they sent us a checklist of all the things we wanted in our tiny house, we filled it out and got a final price and contract. This is actually really great at this point. We don't have to worry about floor plans or picking appliances. We can just tell them what we want and they're going to build it for us. Then comes funding, no problem, I have great credit and our income is sufficient to support the loan. So easy, right?! NO! Of course not! As it turns out the order in which our builder did things and the order our bank would give us money were completely opposite. The bank needed a VIN and title upfront to give the money. The builder needed money first then they could get the VIN and the title would be given after all the money was given and the home was finished. Well. Houston we have a problem. Because an RV loan is the only way to fund this at this exact moment in our lives there's no way we can get around this. Neither the builder, nor the bank would work with us. Which is fine, they both have their ways for a reason. This led us to the idea of just buying an RV. It would be a lot easier since we'd be able to go through a dealership. Right. Easy.
CHAPTER FOUR: RV LAND!!
Once we decided on buying some sort of RV a weight was lifted. We didn't have to worry about building a house, then we didn't have to worry about someone else building our house, now we don't have to worry about buying a house at all. It's basically a car and we've already bought one of those. We shopped around and were initially drawn to fifth wheels, they're big and house-y, lots of space and fireplaces. We decided we'd just rent a truck every 3 months and move it that way versus buying a truck which would double the price. Then we started looking at actual motor homes. The first one we stepped into cost $400k. Uh, we couldn't even spend that much on a real house much less a motor home but let's be real. It was amazing. After we tiptoed through that one and started entertaining the idea of a motorhome we discovered Class C motorhomes. They just make the most sense. We don't have to buy/rent a truck to pull it, and in fact it can tow my Escape. Plus, Class C motorhomes cost a fraction of the big ol' A's. The one we were looking at was actually an ACE. It looked like a Class A with the flat front but it was only about 30 feet long. It was all decked out, the previous owners full timed in it so it was well taken care of. And it was used, so it was even less $$. Once again, great situation, we just needed the monaaaay. But this time it was different. We were actually going to use the money for an actual RV, not a tiny house, so no twisting the truth.
(Side note: you can't really say you're getting the money for a tiny home - loans for those don't exist yet. You also can't say you're going to live full-time in an RV when applying for a loan. All things where you have to watch what you say to people.)
CHAPTER FIVE: SHOW ME THE MONEY! No? Okaybye.
So in all of this I never anticipated that getting a loan would be that hard. I had great credit and we could make the payments. That's it, right? Nope. We got a great lesson in Loans 101. A class I'll be happy to never take again quite frankly. Okay, refresher, (as I'm sure you spent a lot of time looking at how cute we look at the winery and all) we've decided on an RV, it's used and in our price range, all we need is some dang money! I mean, do YOU have 70k lying around? (If you do could you give it to us and we'll pay you back in monthly installments?) We went to a few different lenders and ended up at Wells Fargo and got really far. Then got turned down because they couldn't verify my income, even though my employer graciously wrote them a certified letter verifying my housing and because we'd never had a loan that big before. Uh. No duh we haven't had a loan before. I took all of this 100% personal, and I know it's just business. They don't know me from the next guy. They don't know how great we are and how Ryan's really funny, and how we've got a budget just for this RV and we will make our payments. But still. Shot right to the heart. Ryan and I experienced so much disappointment in this whole process. We just knew this was for us and it was really disheartening to have set back after set back.
CHAPTER SIX: The End........of the Beginning
In the process of learning all the loan stuff we learned a very important word - amortization. Ryan and I were really ignorant about loans in general. No one had every really taught us about loans and interest and all that. Ryan and I are simple folk. Interest to us meant a set specific number. Like 10% interest on $70k was $7k total...uh...no. RV loans are like mortgages or cars. You don't just pay 10% interest. By the time you pay it off you've actually paid more like 100% total interest - to the bank. The bank? They get as much money as the RV cost? That doesn't quite sit right with me. Nope. Not one bit. It'd be one thing if it were our tiny house that we'd live in for the rest of our lives. Realistically, we're not going to park an RV on some land and live in it someday. We'd be spending twice, once for the RV now, and once for the tiny house later and that just seems like a waste of money. SO...
CHAPTER SEVEN: New Plan.
We needed to step back and reevaluate why we were doing this in the first place. We wanted to be rent/mortgage free as quickly as possible and we wanted a place to call our own. We're still set on our precious little tiny house. It's going to happen. No substitutions. However, we're going to save money for it first. My millennial heart breaks knowing there will be no instant gratification for us. Ha! We want it yesterday and that's just not going to happen. So we're getting our finances in better order (I'm eyeballing you Sallie Mae and UMHB). We'll be putting our "payments" in savings and when the time is right we'll pay for it in cash. Hopefully...we all know how well our plans played out last time. Yeah, yeah, I'm sure it's for the best and whatever. But we're still disappointed. We haven't seen an episode of Tiny House Hunters in a while, the wound is still too fresh. But soon we'll get back into it and pursue it again with our new plan of attack!
Phew! That was a long one! In my next post, I'll indulge where we're going next! STAY TUNED!
Okay, so here's the long version:
CHAPTER ONE: The Home and Garden Show
On June 20th - I'll never forget the day - Anaheim hosted a lovely Home and Garden Show. Ryan and I were super stoked about it because Escape Tiny Homes was going to be there and we were going to actually get inside one and get a feel for the space. We were also excited about asking Randy...the owner? builder? I don't know...tons of questions. Well, we finally got Randy cornered and picked his brain...and were instantly disappointed. Randy told us that in order for our tiny home to be RVIA certified it had to be built by a RVIA certified builder - welp, that makes complete sense, why didn't we think of that. We just assumed we could build it "to code" and we would RVIA certify it ourselves. We're dummies. This one bit of information meant two things: first, the price of our tiny home just doubled, if not tripled. Second, we weren't going to get to actually build our house ourselves. I'm not sure if y'all remember, but this moment was exactly 4 hours after I posted the initial blog about our tiny house plans. So much for having our SugarHoneyIceTea together.
 |
| PICTURE PAUSE: Hiking in Malibu - it's beautiful |
Why is RVIA certification so important? Well, unlike a lot of the people on HGTV, we want to actually travel in our tiny house. Like, not just to the place where we're going to park it for a few years. We're going to be moving every three months and to cities we've never lived in. In order to stay in most RV parks across the US your vehicle must be RVIA certified. Also, in order to get funding, a lot of people get RV loans because it doesn't qualify as a house for mortgage so it must be RVIA certified - and it's darn near impossible to get a personal loans for that much (remember, we can't build it ourselves-instant budget buster). If we still went with building it ourselves it would be exponentially harder to find parking in a new city every three months because you can't just park it anywhere. We would've been at the mercy of craigslist or anyone else who would consider letting us park it in their backyard. Plus, no hookups.
CHAPTER THREE: The Switch
So a couple days after the ill-fated Home and Garden Show that we had to sulk through the rest of, we found our tiny home builder. We were going to use a tiny home builder out of Tennessee that was RVIA certified and priced at half the price of the previous builders we looked at. Score! We got into contact with the builder, they sent us a checklist of all the things we wanted in our tiny house, we filled it out and got a final price and contract. This is actually really great at this point. We don't have to worry about floor plans or picking appliances. We can just tell them what we want and they're going to build it for us. Then comes funding, no problem, I have great credit and our income is sufficient to support the loan. So easy, right?! NO! Of course not! As it turns out the order in which our builder did things and the order our bank would give us money were completely opposite. The bank needed a VIN and title upfront to give the money. The builder needed money first then they could get the VIN and the title would be given after all the money was given and the home was finished. Well. Houston we have a problem. Because an RV loan is the only way to fund this at this exact moment in our lives there's no way we can get around this. Neither the builder, nor the bank would work with us. Which is fine, they both have their ways for a reason. This led us to the idea of just buying an RV. It would be a lot easier since we'd be able to go through a dealership. Right. Easy.
 |
| PICTURE PAUSE: Leo Carillo State Beach in Malibu |
Once we decided on buying some sort of RV a weight was lifted. We didn't have to worry about building a house, then we didn't have to worry about someone else building our house, now we don't have to worry about buying a house at all. It's basically a car and we've already bought one of those. We shopped around and were initially drawn to fifth wheels, they're big and house-y, lots of space and fireplaces. We decided we'd just rent a truck every 3 months and move it that way versus buying a truck which would double the price. Then we started looking at actual motor homes. The first one we stepped into cost $400k. Uh, we couldn't even spend that much on a real house much less a motor home but let's be real. It was amazing. After we tiptoed through that one and started entertaining the idea of a motorhome we discovered Class C motorhomes. They just make the most sense. We don't have to buy/rent a truck to pull it, and in fact it can tow my Escape. Plus, Class C motorhomes cost a fraction of the big ol' A's. The one we were looking at was actually an ACE. It looked like a Class A with the flat front but it was only about 30 feet long. It was all decked out, the previous owners full timed in it so it was well taken care of. And it was used, so it was even less $$. Once again, great situation, we just needed the monaaaay. But this time it was different. We were actually going to use the money for an actual RV, not a tiny house, so no twisting the truth.
(Side note: you can't really say you're getting the money for a tiny home - loans for those don't exist yet. You also can't say you're going to live full-time in an RV when applying for a loan. All things where you have to watch what you say to people.)
 |
| PICTURE PAUSE: A lil love at Sunstone Winery in Solvang, CA - you can see the wildfire smoke behind the trees. |
So in all of this I never anticipated that getting a loan would be that hard. I had great credit and we could make the payments. That's it, right? Nope. We got a great lesson in Loans 101. A class I'll be happy to never take again quite frankly. Okay, refresher, (as I'm sure you spent a lot of time looking at how cute we look at the winery and all) we've decided on an RV, it's used and in our price range, all we need is some dang money! I mean, do YOU have 70k lying around? (If you do could you give it to us and we'll pay you back in monthly installments?) We went to a few different lenders and ended up at Wells Fargo and got really far. Then got turned down because they couldn't verify my income, even though my employer graciously wrote them a certified letter verifying my housing and because we'd never had a loan that big before. Uh. No duh we haven't had a loan before. I took all of this 100% personal, and I know it's just business. They don't know me from the next guy. They don't know how great we are and how Ryan's really funny, and how we've got a budget just for this RV and we will make our payments. But still. Shot right to the heart. Ryan and I experienced so much disappointment in this whole process. We just knew this was for us and it was really disheartening to have set back after set back.
 |
| PICTURE PAUSE: Ryan and I, mostly Ryan, carrying the dogs during our hike in Thousand Oaks the other day. |
CHAPTER SIX: The End........of the Beginning
In the process of learning all the loan stuff we learned a very important word - amortization. Ryan and I were really ignorant about loans in general. No one had every really taught us about loans and interest and all that. Ryan and I are simple folk. Interest to us meant a set specific number. Like 10% interest on $70k was $7k total...uh...no. RV loans are like mortgages or cars. You don't just pay 10% interest. By the time you pay it off you've actually paid more like 100% total interest - to the bank. The bank? They get as much money as the RV cost? That doesn't quite sit right with me. Nope. Not one bit. It'd be one thing if it were our tiny house that we'd live in for the rest of our lives. Realistically, we're not going to park an RV on some land and live in it someday. We'd be spending twice, once for the RV now, and once for the tiny house later and that just seems like a waste of money. SO...
CHAPTER SEVEN: New Plan.
We needed to step back and reevaluate why we were doing this in the first place. We wanted to be rent/mortgage free as quickly as possible and we wanted a place to call our own. We're still set on our precious little tiny house. It's going to happen. No substitutions. However, we're going to save money for it first. My millennial heart breaks knowing there will be no instant gratification for us. Ha! We want it yesterday and that's just not going to happen. So we're getting our finances in better order (I'm eyeballing you Sallie Mae and UMHB). We'll be putting our "payments" in savings and when the time is right we'll pay for it in cash. Hopefully...we all know how well our plans played out last time. Yeah, yeah, I'm sure it's for the best and whatever. But we're still disappointed. We haven't seen an episode of Tiny House Hunters in a while, the wound is still too fresh. But soon we'll get back into it and pursue it again with our new plan of attack!
Phew! That was a long one! In my next post, I'll indulge where we're going next! STAY TUNED!
 |
| Hollywood! We met Katie on our assignment in LA 4 whole years ago. Her and her mom Mary Ann came to visit. |
Sorry guys!!! I was so stoked for you. Great new plan though
ReplyDeleteYeah we're pretty bummed. But now we'll stick it to those big banks. They'll NEVER GET OUR MONAAAYYYY!!!!! Haha...maybe...
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