[mikester]

I've been pondering this for a while now. I live in the LA area and we bought our house well enough before the boom to be in good shape but not far enough in advance to be in great shape.

We have decent equity and the house has never shown a paper value lower than what we paid. Our neighborhood is a very good one and there is very little inventory to choose from and houses are usually sold before they are even really on the market.

With this in mind it would be a challenge to get into something bigger at a 'reasonable price'. So I have been considering simply redoing the house I have to what I need. Our lot is smaller than I'd like but I can work with it and have pretty nice looking dreams about what it could be. It would be expensive though I'm sure.

Still, depending on the cost per sqft it could still be less than buying a house that may be enough of what I want.

Problem is - I don't exactly know where to begin. I was going to go talk to the city planning folks at the recommendation of a contractor I know to see if they will let me increase my sqft as much as I want to. I don't really want to increase the foot print of the house on the land I just want to go up and build a basement (I already have a basement garage so it would be expanding that). Energy efficiency, solar panels (makes the wife happy) and all that.

The financing part is not clear to me though - would it need to be a construction loan or a HELOC (which wouldn't nearly be enough to cover this type of thing). I'm expecting this to run into the $200-300k range.

I'd have to move the family out of course as we'd be going down to the studs and then some. Earthquake ironwork probably, basement excavation, adding a 2nd story and then within that building the dream with a large workshop/garage basement. 4-5 bedrooms plus an office, a nice living space/family room and kitchen and a deck overlooking the pacific off in the distance (you can see it nicely from my roof now).

It's an ambitious plan but if I could do it for what I have in mind or even a little more I still have saved $300k over buying a similar setup that I see for sale today.

I also plan on talking to my bank to see what they say but I figured I'd hit up the brain trust as well. Outside of my bank which is a national I also could go to my local credit union and the local bank in town.

The current house is circa 1952 built by the original owner with a crooked ruler. I will be happy to tear it up.