The cabin continues...

Many of you know that we are attempting to build a free and clear cabin in Idyllwild using only money made from real estate investments, and not from the salary we earned by working. Well, we've had a few setbacks with the market going south as it has. Plan A was to sell a piece of land we have in the high desert but the market evaporated. Plan B was to sell the present small cabin that we have and use that for construction money. Well, the cabin that was worth $300K is now worth 225K, so plan B doesn't work either. It will still take $350K to build the cabin, and so how to do it?

So we put our thinking caps on and came up with Plan C. By the way, this exercise is to teach all of you how to use real estate to buy real estate. I could build the new cabin with an equity line, and then pay it off in time, but what can you learn from that?

So here's the plan. We are building an addition on the small cabin we now have in order to increase it's value through sweat equity. I admit this is tough to do in the current environment, where it seems that it costs more to build that it is worth when you're done. But in Idyllwild there are plenty of 2 bedroom cabins for sale, but anything with 3 bedrooms is worth at least $300K. So we're adding that extra bedroom and bath and hoping that will get us close enough to start building the ultimate cabin! The photo above shows some of the firewood from the 4 Jeffrey Pines we had to cut down to make room for the new addition!

You may ask where the $30K is coming from to build the addition? From real estate of course. We are in the process of buying a home and expect to fix it and flip it for a profit. Whoa! Flipping in a declining market? Not for the faint hearted to be sure. Stay tuned - the adventure begins next week!