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Saturday, January 1, 2011

Kickin' It - 2011 Style

January's have a way of being big sales months for us. Januarys, Februarys - since we start some homes typically in September and October, we bring them home to roost early in the year. A lot of times, in the last few years, we won't close homes in December, since that would drive higher income taxes, payable more or less immediately, as opposed to timing them to finish in January, which allows us to float the tax money for a year.

It's amazing once you start making some money how much good tax strategy counts. Very rarely is a purchase made, a debt paid down or an investment made without understanding the tax implications of said maneuver. And being in NY State, makes this effort only more necessary.

For instance, say you have a 5% home mortgage, and say you find yourself with a little extra cash that needs to be put to use and you are trying to decide whether to pay it down more quickly than the 30 years, or maybe to invest it for growth. If you find a stock or bond paying 6% it may be a no-brainer to keep the mortgage debt and invest the cash - until you take taxes into the equation - you earn 6%, then need to pay 15% in capital gains, whereas paying down debt, i.e. reducing your mortgage, is a true 5% return early on in the paydown, even more since some of that interest is deductible.

Anyway, it gets confusing real quick for non-math head, - all I know is that at this point, if I'm not calculating post-tax returns, I'm really not nailing down the true colors of the investment. For example, since I deal with real estate for a living, most of my real estate transactions/profits are treated as ordinary income, as opposed to capital gains, making real estate investment not really that attractive other than our day to day homes.

This may one of those rare times that all the people who write me saying I have no idea what I am talking about may be right, but I know I'm onto something nevertheless.

Up above and down below are two pictures of Cottage 33, that is set to close in the next week or two. Big bleacher stairs finish off the front. These two financial professionals were inspired by Cottage 29, and used that design as a resource for this design, with lots of little pieces of customization along the way. We run across a lot people who downplay their design talents, but we find those that choose to build and buy from us have an active or latent design itch that needs to be scratched. Granted, having the opportunity to live in what you design is just the prize, the by-product of making it happen during real life during the weekday. Once we get it tightened up with the appliances and stuff, I'll post some real great design decisions that were made along the way.

Below is a stained piece of built-in cabinetry that I think is planned to hold books and wine. We also have a retractable big screen and AV system tucked up under that top piece of wood, that glides down effortlessly when a button is pushed.

Pretty fast bath with red vanity, subway tile and black and white flooring. Modern lighting as well in strategic areas.

Micro 2 is shaping up nicely with rough sawn spindles and a stained porch roof.

A clean modern-leaning interior works for me. This is a big room for a small house. We used a plywood countertop sealed with a heavy duty epoxy.

Great bath vanity, very unique, with the duel flush toilet.

We get asked if our houses are green sometimes, and I'm like, ah, YEA. They are about the greenest homes out there - of course, you won't find that red herring word 'green' anywhere in our literature - I prefer 'high-performance' - or 'kick ass' - or 'super fly snuka off the top rope bad'.

Green, how overdone. It's a great idea, but what it means to me is great insulation and small homes and best building practices. How unsexy is that proposition. The fact that all our homes come with spray foam insulation, literally no lie big time upgrade that comes standard in all our homes, is an indication of our seriousness - a little product that carries a big load, and no bullshit saves our customers some serious dough.

Big window in the bedroom. This micro-cottage should close in Mid-January.

Cottage 31 - unique, detailed and expertly executed, this abode for two design and fashion professionals will live large above Lucky Lake outside of Narrowsburg, NY.

Mark the floor sander who hurt his back and just about gave me a nervous breakdown was working hard this morning, New Years Morning.

In fact, all of these above and below pics are pics of holiday progress. We keep working, getting it done, keeping it real.

Good pic of him putting down the polyurethane so we can continue with construction on Monday. Cool cable rail, hand made barn door on right, and a sunken living room. One of the owners of this cottage writes for the NY Times and did a remarkable article on Courtney Love the other week - in my mind, it was remarkable not necessarily for the content, but because he painted the scene (and the scenes) so subtly tangibly. You felt you were a fly on that wall. It was good writing. My friends in Richmond had read it and said the same thing. You could smell the cigarettes and booze, and observe the obscene a lot like Nick did at Gatsby's parties. I guess what I am saying is it was non-judgmental - it was good reporting.

And our first Shack at 500 sq ft, 1 bedroom, views, and a couple of porches. The siding came from the factory stained, and the 2nd coat will take it to another color. Cedar shake in the front door nook. It's our first Shack, and we are hoping to get around $160k for it. When you build a house this small, most of the cost is wrapped up in land, driveway, well, septic, clearing and foundation, and electrical infrastructure. It will be interesting to see who buys this house when.

Open big room and big stone boulder steps. Norm done that.

And great big ole Farm 15 on 7 acres. This home and garage is really moving along and I'll be passing along some advice to 'lock in those rates' soon, meaning we are within 60 days of closing.

The sheetrock is in, 2nd coated. By end of the next week we will be putting in the floors and wood wainscotting and ceiling planks. This farmhouse will close in Feb/March.

And Cottage 34, bring back the siding yellow that we used on Peter's house up in Walton. If you remember, Peter was that semi-famous dress designer.

I think this enlarged Cottage 23 really has some great proportions.

Walk out basement (above) and spray foam insulation below. This house will close in March.

And our newest piece of speculation - Cottage 35. Going to be a great little 1000 sq ft cottage. Think Cottage 19, only different.

And the one house we currently have for sale - Cottage 29.

So much going on that I forgot to snap a winter shot of Farm 14, that will be closing in January as well.

There you have it - half our 2011 sales goals already in the bag. Should be a banner year of economic tailwinds and hard-earned experience.

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