Help me with my thoughts - financing partial home remodel

[nomad100]

I have the most expensive parts of my house to renovate (kitchen and 2 bathrooms including moving laundry upstairs if possible) plus a family room overhaul (opening a wall between the kitchen and family room to create a breakfast bar type situation, replacing paneling with drywall, etc.). All are basically gut jobs. Those parts of the house are 70s "fabulous" so I did some minor updates when I moved in (replacing faucets, paint, etc.) but the bigger layout/cabinet quality issues remain. 

I own my home outright.  Value has doubled since I bought it.  Updating the kitchen and baths would increase the value even more. An updated house in my neighborhood with less square footage, less desirable lot and floorplan sold for $100+K more than my house is valued at (which is bonkers to me) last month.  

Up until now I have been cash flowing my updates with a mix of hiring stuff out and DIYing but after years of living in a continual state of renovation, I am over it.  OVER IT!  I want to try to get things done in one, or two, fell swoops.  

At this point I have NO idea how much it will all cost but I am thinking at least $60K (probably closer to $80K) for all projects.

Does it make more sense to 
a) wait 3-5 years to save up the cash 
b) Take out a HELOC to pay for everything
c) sell some stock (taking the tax hit) to pay for it
d) something I am not thinking of

I am not particularly worried about resale at this point because I will be in this house for the foreseeable future since my aging parents live close and they want to stay in their home as long as possible.  Given my dad's aunt just turned 100 and lived on her own until she was 95, they could be there for another 10 years before needing to move into assisted living. 

I just want a finished house I can enjoy for a number of years before I do move vs doing it bit by bit and then once it is done, moving a few years later. 

What are your thoughts?  

[turkletsmom]

I'd do the HELOC. I wouldn't take money from investments since I'm sure that the market is doing better than whatever interest rate you'd have on the HELOC. Plus, worst case, if something happened and you had to pay it off, you could cash investments out then.

[aspentosh]

I'd do A or B, depending on how antsy I was to get it done. If you're ok waiting, then I might go A. But if you're comfortable taking out a HELOC, having a payment, and you're itching to get it done, I think B is a really good option. I see a lot of benefit for giant upheaval and then finishing it vs spacing out the projects or waiting.

I definitely wouldn't do C, personally.

[dancingirl21]

Are you in a good financial position to take on a new monthly loan? If so, I would do the HELOC and get as much done as you can at once, rather than living through constant renovation.

Fwiw, we just did a full gut job of our kitchen. I think the final numbers came in around $50k. We bought all new appliances, custom cabinets, etc. However, my DH is a general contractor so we didn’t need to pay for that service, which probably saved 25%. We are M/HCOL. Kitchens are expensive.

[ellipses84]

I’d do B. If I’m understanding correctly you have no mortgage and your house is 100% paid off? I’d consider monthly Heloc payment a housing maintenance cost (that’s been deferred 30-40 years). I think you are closer with your estimate of $80k and in this market it could be $20-40k higher but prices of goods are going down and it’s definitely more cost effective to do all the big wall/ MEP change projects at the same time or consecutively. Get estimates from 3 recommended contractors and if they are high, ask them if they have ideas for more cost effective options.

[nomad100]

dancingirl21, I am debt free and have no other loans. I am in a MCOL area. Even as I typed $60K I knew it was too low and I was being overly optimistic. Ha! For everything, it will be closer to $80K, I am sure. Thankfully, I do have an amazing kitchen and bath design firm that I can use.

[nomad100]

@ ellipses84, Yes, I am mortgage free and the house is 100% paid off.

My plan would be to get plans drawn up this summer and then start interviewing contractors while ordering stuff like tiles/flooring, appliances, cabinets, etc. since those all have ridic lead times right now with the goal to start sometime in late 2021/early 2022. I have space to store stuff in my basement, garage or guest room. I know most of my good local contractors are really busy right now so I won't get on anyone's schedule any time soon anyway.

Now I just need to accept the reality of having my whole house in a hotter mess than usual for however long the 3 things take. Kitchen and family room are on S side of the house, hall bath is in the middle and my bath is on the N side of the house. So no area will be untouched by construction.

[shopgirl07]

I think you’re way underestimating the cost, even in an MCOL area. I would think what you’re proposing is closer to $200K. So I’d get more concrete figures before you decide on how to pay for it.

[simpsongal]

Do the heloc, I bet you’ll save quite a bit while you plan too.

[goldengirl]

Semi lurker here
We just finished a partial gut of kitchen and came in at $90k. MCOL (SW Fl). However we did have custom cabinets and replaced all appliances plus added a commercial ice maker. It is 10000% worth it as our layout is soooo much better now. Our old kitchen (small galley off garage) is now our inside laundry. Laundry had been in garage.

We also gutted both full baths after we moved in back in 2015. We spent about $30k between the two. Our house was built in 1948 and neither had seen much change in decades. The $30k was a bargain as we’d gotten a quote from another GC on just one that was $27k.

We paid cash for all but in your situation I’d definitely do the HELOC. We still have a mortgage so we don’t want any additional debt.

[Roc A Bee]

To do a kitchen and two bathroom gut jobs, I would guess at least $100k ++++

That being said, I’d use a Heloc.

[jewel]

I would price it out with a contractor or 2 and then consider your options for funding, once you have a ballpark price.

I’m in a MCOL and was just quoted over $30k for new kitchen cabinets and quartz counters. And that didn’t include any new appliances or plumbing work that would need to be done to reinstall. I would imagine that a total gut job of the kitchen and bathrooms would be well over $100k, at least.

If that’s the case, I’d go with the HELOC.

[nomad100]

Luckily I have a couple friends who have done kitchen renos - though their renos involved additions and stuff - and have reached out to them to start getting names to contact.

Send reno survival vibes because I think this is going to be a rough and long road given the layout of my house.