There's a great book that shows several amazing stacked-stone grottos and similar structures. 'In the Company of Stone' , by Dan Snow. You can get it from Borders... Regards, K4

I will antiquesilver. We are concentrating on the kitchen right now. I am hoping to have it mostly done by end of summer at which point we hope the rest of the house moves along a little quicker.

Capedude, you bring up our exact concerns. We definitely know we'd be getting much more bang for our buck with this home and property versus building. We love old houses and breathing new life into them but we don't want to take on a sinking ship either. What we do know is the current homeowners have lived at the property for 41 years which we like. He is a retired general contractor for a pretty big regional firm and it seems that no corners were cut when updating through their tenure. Electric is 400 amp, windows all replaced but for the front storms in living/dining rooms for historical purposes. The hvac was updated and the home has central ac and forced hot air. New roof with tear off in 2008. We need to find out about the insulation. All doors closed and the house felt solid and straight when we toured it. The part that took the wind out of our sails a bit was the basement. It was a typical 1940s unfinished basement. The seller's disclosure admits to sump pumps running infrequently and the homeowner says if they have very heavy rain for a few days there are a few areas where a very small of water may come up through the slab. He further stated that they have not had water in several years. This makes us hesitant since we know water can be a home's worst enemy but it may also be able to be remedied to have a finished playroom type area in the basement for the kids. We've owned a 1920s and a 1980s home before (both with various issues not found by home inspections or contractors coming through prior to buying) so we know that ever house has its own issues, even new ones. We'd like to do our due diligence in feeling that we are getting a home with good bones.

A couple of follow up points... A bird in the hand is better than two in the bush. A sale today without marketing has real value. You will have access to the equity today and can use that money in the build and you will not have to worry about the difficulty of selling the home. Additionally, a sale without realtor's commission has real value. These two things give you some leeway to make a deal that nets out being better for both parties. You can give a discount because you are getting real value above the traditional sales method and if the buyer is flexible he can also get some real value. However, depending on the financial situation and your local real estate market, it is entirely possible that you will lose money doing this. You note that your house is paid off, but in a rent back situation you are going to have to make rental payments and probably at the market rate. It is entirely possible that given enough time or the right market conditions this will destroy any value you receive. ---- There are other options out there. Residential real estate has relatively few and pretty simple transactions, there are many other sales arrangements out there that are atypical for home sales but fairly standard in commercial real estate. For example, you might do an option contract on the property with a guaranteed sell by date. In that case he would pay you some amount today (usually between 5% and 10%), this secures his right to buy the property at a later date for a set amount. In a residential transaction that payment would probably be a credit toward the purchase if he agrees to complete the sale and would be held in escrow by the attorney. You agree that you will offer the property for sale no later than X date, but may offer the property for sale on any date before that with a 60 day notice (or whatever you are comfortable with). If he passes on purchasing that day he loses the money. Inspections would be done when the option contract is executed and you will have a refund period just like a typical contract but the final home sale wouldn't have an inspection or an appraisal contingency. He can still pull out at any time, he just loses the option payment he made. This protects him from things like a slowdown in the economy or a major loss of value on the home (he only risks the option payment he made), and incentivizes his going through with the sale. It also means you don't have to make rental payments. ----- I used to do options in rental properties quite often. Frankly, I just find the houses that look like they could use some money and offer them a few thousand dollars for the option to match any offers when/if they sell. Nine out of ten times they just call me up and ask for an offer before they even call a realtor and I get multiple properties close together over a period of a few years which really lowers my costs. Note: To relieve my conscience I only make fair offers, I am not trying to take advantage of people and although that certainly costs me money, I do sleep better at night. I despise those people who offer pathetic amounts of money to people in desperate situations.