Getting Started on Living the Dream

I don’t have a specific recollection of when I got the idea, but early on in adulthood and just after college graduation, I started telling people that I was going to build a house of my own someday.  I knew that I wanted to live in house, at the time I was living in a cramped pre-war railroad apartment on Washington Street in Hoboken, NJ.  I figured it would be good to build it to my specifications and to be the first one to live in it.  I am from Bergen County, I figured that I would eventually migrate back that way and find a plot of land to build on.

Circumstances changed over time and I ended up buying a condo (at what seemed like a high price at the time) in January, 2001 in Hoboken.  It was a great move at the time, it is much nicer than my old rental on Washington Street. It has a parking space big enough to fit my car and my motorcycle, and a small terrace that I could use to grill.  It certainly has appreciated nicely since 2001 and turned out to be the best investment I ever made.  I joined the condo board to protect my investment and I have served as board president for the last six years.

Time went by and I never left my apartment.  I decided on a whim to replace the kitchen in 2011 and was very pleased with how it came out.  I thought it would be good practice if I ever did decide to go ahead and pursue the homebuilding dream.

About two years ago, I suddenly realized that I was getting frustrated with my living.  My neighbors were driving me nuts, especially in my capacity as condo board president.  They seemed to think it was ok to sit on their lazy asses while I volunteered my time to keep the building well maintained – and then to complain about the job I was doing!  Grilling became an issue, too.  I was fine for the first ten years living here, and slowly the neighbors began calling the fire department whenever I grilled.  I think the problem there is that the brick wall on my terrace obscures the view of the grill from the street so all people saw was smoke and they got spooked.

So, in the summer of 2014, I decided it was time to leave and that I needed a plan.  I wanted my own house but I didn’t want to move all the way back to Bergen County like in my original idea.  I work in Manhattan and loathe long commutes.  I also have a lot of ties to Hoboken having lived here for over 23 years now.  The prices for stand-alone properties in Hoboken are prohibitively expensive for someone with my means so I started by looking just outside of town. With Uber, I can move back and forth to neighboring towns very easily so I decided to stay in Hudson County.  I have a very good friend who lives in Union City and her living situation definitely influenced my decision to consider the area she lives in.

During my search for a new home, my plan changed over time but I settled on these requirements:

  • It had to be located in Jersey City, Union City, or Weehawken, north of Route 139 and on or east of Palisades Avenue, excluding the Weehawken or Jersey City waterfronts (both of which prone to flooding and too expensive).
  • It had to have indoor parking for the bike and the car.
  • The size of the lot needed to be a minimum of 2,500 square feet.
  • It needed a backyard that I could use to cook and entertain in, as well as grow a vegetable garden.
  • There had to between two and four bedrooms, and at least two bathrooms. Nothing bigger than that.
  • It had to be one of these options that fit my overall price point:
    • An empty lot that I could build a house from the ground up.
    • A house that was so cheap I could afford to knock it down and build from scratch.
    • A house that was in the mid-price range that I could gut and partially expand.
    • Something that was move-in ready

Once I made my mind up and set the search in motion, I realized that I was about five years too late in getting started!  Hudson County is the most densely populated country and there is not much empty space left in my target location.  Distressed properties are often snapped up by flippers or developers in shady deals before they can hit the open market.  An outsider like myself who spends most of my time on my full-time job really doesn’t stand much of a chance in finding a good deal that someone else isn’t already looking at.  There are so few move in-ready houses in my target location for sale that prices are astronomically high for the ones that are.

A year of frustration came and went.  I stared obsessively at Zillow all day long, every day, waiting for something good to trigger one of my alerts.  I surveyed neighborhoods from my motorcycle, stopping to take pictures of places that looked abandoned or condemned so I could try to locate the owner via public tax records.  I found one really cheap house in my teardown price range that hit the market the week I was on vacation; it was sold before I got home. I visited a few places that looked decent online but were pretty lousy when I visited them in person with my realtor.

While this was going on, I did some prep work by reaching out to some architects to discuss what I wanted to do.  Most of the Hoboken-based architects I found online barely returned my messages (I guess they are too busy desiging crappy luxury Hoboken rentals) but I finally established a relationship with one who did return my calls and said he could help me.  He would eventually get the job because he was pretty much the only person who talked to me!

In September 2015, I finally found a lead that looked promising.  It was on 19th Street in Union City and matched all of my criteria for the mid-price renovation option.  I called my realtor and ran out that night to take a look at it.  We quickly were able to ascertain that it was a flip, someone had bought it out of foreclosure, did a minimal amount of work on it, and was trying to sell it for a quick $80,000 more than what they paid for it.  I knew right off the bat that I was about to get ripped off but I felt like this was really the first house that I really thought I could get my hands on after a year of looking so I wanted to move ahead.

Front of House

The front of the house.  Take a close look at the steps,  each one is a different size.  That is just the beginning of the problems this house has.

This set in motion a crazy chain of events that I had no way of preparing for.  It turned into the wildest two and a half months of my life!

First off, I had no idea how much the renovation would even cost. My realtor suggested that I call a contractor and get him to come out the next day. The realtor would meet him at the property and we could get his opinion on a rough estimate of what it would cost to do the renovation.  This is where being condo board president finally paid off, I knew a contractor that we did business with in my building and I called him that night.  Since I’ve given him so much business, he was willing to come out on no notice and help me out.  He showed up the next day and gave me an estimate I was comfortable with.

It wasn’t too much to go by, it was just one contractor’s opinion based on my rough description of what I wanted the house to look like when I was done.  But it was all I had so I decided to pull the trigger and make the offer on the place.

Back Yard

The backyard is the perfect size for what I’d like to do with it.

I was immediately in trouble because I had no idea how to finance it.  I didn’t know if I had to take out a regular mortgage and borrow against the house after closing, or maybe even borrow against my current condo and finance construction that way.  I got put in touch with a mortgage broker who suggested a 203 K loan to purchase the house and to fund the construction.  This is a type of construction loan that is regulated by the state.

This got me started on what was a very atypical mortgage closing process.  Usually when you buy a house, you need to get it appraised for an amount equal to or greater than the selling price.  The mortgage company then approves the loan and you are good to close provided everything else falls into place.  In my case, I had to prove that the value of the finished product was worth the amount that I had to borrow.  In order to do that, I needed a plan for what the house would be like when it was done, and to base the estimate off of that plan.

So, I gave my architect a ring and told him he was hired.  A deposit check later, I had him on the property and described to him in general terms what I wanted.  He measured the house, asked me for a survey, and went off to come up with a draft design.

While that was in motion, I had the house inspection done.  The inspection report was a disaster, there couldn’t have been more problems with the house.  Pipes were leaking, the roof had to go, there were holes in the siding, the problems never ended.  I was comforted by the fact that I was about to gut the house so pretty much every issue that it had was about to go away.  I used the leverage in the inspection report to negotiate a $5,000 closing credit from the seller which was nice.

The architect came back with a draft floor plan a few weeks later and I was floored by the design.  The house has two livable floors and he completely redesigned the interior and also planned extensions in both the front and back of the house.  The first floor was going to be an open concept great room with dining, kitchen, and living areas, and had a half bathroom.  The second floor was subdivided into three bedrooms and two bathrooms.  The master bedroom had one of the bathrooms and a walk-in closet.  It also had a closet for a washer and dryer and a linen closet in the hallway.  He had a design for an outdoor patio and kitchen in the backyard, another feature I asked him for.  I was amazed at how well he was able to translate my ramblings into a viable drawing.

Downstairs and Backyard

The plan for the basement and garage level, along with the patio and back yard. The solidly shaded areas are the existing basement, the shaded “L” shaped area in the back of the house is new.

Now I had a floor plan for a proposed finished layout so I could begin the loan and appraisal process.  In order to get the loan, I had to hire a HUD consultant whose job it was to review the plan and determine roughly what it was going to cost to build.  He would ultimately be in charge of the escrow loan during the construction phase, doling out payments to the general contractor for completed work.  It took some back and forth with the HUD consultant as I felt like his first draft came in too low and I wanted to borrow more than what he first estimated.  I felt it was important to get as much done in this phase as possible and wanted the funds to be able to do so.

For the appraisal, my realtor and I had to some homework to find “comps” in the area, similar homes that had sold recently to demonstrate that my house would value for the amount I wanted to borrow.  This was another big back and forth process with the mortgage broker as I felt his original appraisal estimate was too low and I wouldn’t be able to borrow enough for the construction portion of the loan.  After a few weeks of us all discussing it separately, he raised his estimate and we agreed on a final number for me to borrow.  The loan was high enough for me to buy the house and cover what we thought the construction was going to cost.

All this was happening while the clock was ticking on my contract with the seller.  He really had no idea what I was doing and why the process was dragging on for so long.  He kept calling the realtor and my lawyer to ask what was going on.  This is where my lawyer really did a great job of keeping things together and on track.  I was fortunate enough to be friends with her before I put this offer down.  She’s represented about a dozen friends of mine for their closings so I already knew she was the best.  She managed to buy me enough time to eventually get things together and ready to close.

The final two things I needed to do in order to close was to hire a contractor (and have him fill out a ton of paperwork with the mortgage company) and get insurance on the house.  The contractor selection process was the longest and most dragged out portion of this whole ordeal.  I wanted to get at least three competitive bids in order to make the best decision.  The three bid plan is a rule of thumb we use on my condo board, and we typically end up selecting the middle bid.

I started with the original contractor that came to visit my house on the first day of the process.  He took one look at the floor plan that the architect drew and immediately changed his tune.  He told me that this wasn’t what we discussed and that his original estimate would likely triple because the scope had changed so much.  I really didn’t think it changed all that much, and certainly not enough to triple his quote!  Either way, he outright refused to make a bid and told me to back out of the deal while I still could.  So, he was out.

The mortgage broker recommended a contractor that he and the HUD consultant had previously worked with.  I had him over to the house and he said he would come back with a bid.  My father had told me to call someone who had done work on my parent’s house.  I called him and had him do a walkthrough as well.  This put me in a holding pattern as I had to wait for both of these two to come back with bids on the project that hopefully matched the estimate the HUD consultant provided.

These were a tense few weeks as I really had nothing to do other than wait for the two of them to come back with bids.  When they finally did, the contractor that my father recommended came in a higher than the other guy.  I needed to find a way to make a decision between the two.  I asked the mortgage broker for a reference for the contractor he recommended.  I reached out to the person he told me to call and the guy could not have given me a worse review!  He told me the contractor was a complete disaster and he had to fire him and that I should run away as fast as I could.  That was some recommendation!

I wanted to hire the guy my father recommended but his bid didn’t match up with the HUD consultant report.  This took about a week or so to sort out, but we got them to agree on a bid structure and we were good to proceed.  At this point, the house was appraised, I had a plan, I had a contractor, and I just needed to get homeowners insurance.

The homeowner’s insurance policy turned out to be the first real “gotacha” unforeseen cost of this project.  I didn’t think of this ahead of time, but homeowner’s insurance is significantly higher when a home is being renovated.  I got slapped with a $5,600 bill for the annual premium on the new policy.  The only silver lining to this dark cloud is that it will be partially refunded if the construction is done within a year, and I certainly hope we hit that mark!

By all accounts, everything was in place and I was ready to close.  The seller served us with some sort of legal notice that I had two weeks to close or they could cancel the deal and sue me for damages.  So, I pushed my team to get everything done.  My only issue was that the house was a mess, there was a lot of debris in the backyard and a big stack of paint cans under the stairs.  I had been pushing my realtor to have the place cleaned up but the seller was being difficult, saying that he was annoyed with me for taking so long to close.

Great Room

The first floor great room.  The front door entrance is pictured on the right.  From right to left is the dining room, kitchen, and living room.  The existing house is the crooked portion in the middle.  The house wasn’t built squarely in the lot.

As the closing day approached, I used the only leverage I ever had during the whole process.  I told me realtor and lawyer to tell the seller’s people that I wasn’t going to close on the house until the seller cleaned it up to my liking.  I threatened to not show up at the closing and to hold on to the certified deposit check until I was satisfied with the condition of the property.  Faced with the specter of having to sue me and start over with a new buyer, the seller acquiesced and did indeed clean the property up on the day of closing.  I didn’t do a walkthrough, but he texted a series of pictures of the property to my realtor demonstrating that he cleaned up everything I told him to, and a few things that I didn’t!

To recount, I had the following people working for me during this ten-week period, most of whom I didn’t even know when the process started:

  1. My realtor
  2. My lawyer
  3. The home inspector
  4. A contractor
  5. An architect
  6. The insurance agent
  7. A mortgage broker
  8. A HUD consultant
  9. The surveyor
  10. Deed and title agent

Did I mention that I have a full-time job?  Thinking back on it, I can’t believe I found the time to keep everyone headed in the right direction and to get them whatever they needed from me.  It all paid off in the end, on December 18, 2015, I closed on the house and got a set of keys of my own.  The purchasing phase of this journey was complete, and it was time to begin the demolition and construction phase.

At this point in the story, I need to make the following admission: I haven’t got the slightest idea how to design a house, in fact I have absolutely no idea what I’m doing!  I can speak in general terms about what my dream was, but I can just barely articulate it to the professionals working for me.  I have no idea how to tackle the overwhelming amount of details that need to be covered in order to finish a home off.  I know next to nothing about topics such as exterior finishes, smart home wiring, venting gas appliances, kitchen design, color matching or pretty much anything else you should consider when designing a home.  I didn’t even know the difference between traditional, transitional, or modern design.  At the time of closing, all I really had were three things: A concept, a dilapidated property, and a construction loan.


The second floor.  It includes all three bedrooms, both bathrooms, and the closet for the washer and dryer.  We barely had enough room between my house and the house next door to put a window in bedroom 2 as per building code.

Closing on the property was really the beginning of the fun part.  This is one of the most challenging endeavors I have ever attempted.  I have to plan every single detail of this house and make sure it is built the way I want it.  I started to immerse myself in the details attempted to teach myself the things I don’t know about home design.

I wanted to begin with the areas that were most important to me.  Specifically, I want the great room and backyard to be awesome.  One of my biggest passions is home cooking and I love to entertain guests in my home.  I want a kitchen that is both functional and visually stimulating.  I also want a backyard that I can cook and barbecue in, as well as grow some of my own ingredients in a garden.  Something I learned from my parents, especially my dad, was how to grow vegetables and to cook over an open flame.  This is my chance to have a viable space to do both.

Since closing, I’ve met with a half a dozen kitchen designers and also several appliance experts.  I have so many ideas from them, I’m twice as confused as I was before I started.  But I think I’m starting to get ahead of the design discussion, and with my architect’s help, I am optimistic that this is going to turn out well.  The one firm decision I’ve made is that I want the house to fit a contemporary design motif and that the kitchen is going to be the most important part of that design.

Patio Sketch

The architect did a free-hand sketch of what the patio is going to look like.  I’m still playing around with the idea, but that wall is going to be what we are going to work with.  I may add an island between the house and the table.  The area labeled “BBQ” will be where I keep my charcoal grill and my smoker.  

This process is about to get very interesting.  I’m slowly going broke while paying two mortgages because I can’t move into the new house until it is ready.  I have to be patient while the house is partially demolished, re-framed, and re-wired and re-piped.  I have to find the time to plan every last detail of the finish.  There is a possibility that I will fail at this and go bankrupt trying to get this done.  I’m hopeful that there is a much higher probability that this house will be awesome, is going to be a killer bachelor pad, and will become best house in all of Union City.  Only time will tell.

As of the time of this writing, I’m in “permit purgatory”, waiting for the Union City building inspector to give us the final go ahead to start construction.  So far, they’ve issued us the permit to demolish the interior and sent us a letter saying that our plans conform to building code and don’t require a zoning variance.  Of course, I have no patience for this process and can only hope it finishes soon.  The contractor has begun to strip the interior and haul out the debris.

I plan to write about the process as much as I can.  I think it’s been an interesting story so far and I get a lot of questions about it.  There are entire TV networks devoted to home building and restoration so I am going to attempt to share my story along the way.  You’ll get to see me either sink or swim in these uncharted waters!


  1. Holy shit! I give you a lot of credit. I had no idea what you were going through. So cool you are documenting the process. Can’t wait for future updates on your progress!


  2. Wow this is all very exciting… not only will you be taking us through the process, but I am learning vicarious through your blog. Thank you for sharing, I greatly enjoyed reading and look forward to the update! 🙂 I can help you with my expertise in home design it would be my pleasure for my friend!



  1. […] readers will recall my first blog post in which I explained I took out a 203K loan instead of a traditional mortgage to finance the […]


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