Plot Land or Existing House

moe.ron · #1 01-13-2004, 03:07 PM

If you were given the task of obtaining a house for your chapter, would you prefer to by an existing house or a plot of land?

33girl · #2 01-13-2004, 03:17 PM

Depends on what resources are available (i.e. if I had a sister who owned a construction company, I'd go for the land).

KillarneyRose · #3 01-13-2004, 05:36 PM

An existing house. Building is a big hassle.

PhiPsiRuss · #4 01-13-2004, 05:39 PM

I would definitely prefer a plot of land. With the changes in zoning and regulations, a new house can be built that will be future proof for decades to come. With current IRS tax code, new houses can maximize the percentage of the house that is tax deductible.

There is a trend to mandate sprinkler systems in college student housing. It is much less expensive to do this when you build, then it is to retrofit.

There are things that can pop up like ADA compliance. Not only might you need a wheelchair accessable entrance, but you might need an elevator.

Also, a new house, as opposed to a pre-existing one, can be structured to maximize tax deductions for donations made for the house. Donations made to single-use areas, that are educational, are tax deductible. Also, a percentage of common areas and annual maintenance, in proportion to educational areas versus non-educational areas, is tax deductible.

ETA New houses can also be built to lower annual insurance costs, as well as maintenance.

kddani · #5 01-13-2004, 05:41 PM

I think a lot depends on the area, the money available, and what other groups had.

For Pitt, i'd probably say buy an existing house. There's not enough free land, and there are a ton of great older houses that would be large enough.

greeklawgirl · #6 01-13-2004, 05:51 PM

Land. My daddy is an outstanding architect who owns his own contracting firm. He would do it for cost if I asked him nicely.

Kevin · #7 01-13-2004, 06:19 PM

One of the members of our alum advisory board owns a construction company. So I'm sure when the time comes, we'll opt to build rather than purchase an existing structure. With all of the local building codes, it's just easier to start from scratch than to rennovate an existing structure.

AOIIalum · #8 01-13-2004, 06:23 PM

If available and financially feasible, land in a heartbeat. As Russell stated, the benefits of building can really outweigh the purchase of an existing house. Also, with building you can maximize your space as needed for your own GLO and not "retrofit" rooms or areas for your chapter's needs. (For those of you in houses with sufficient parking, for example, thank your House Corporations!) There's nothing like a chapter of 60+ before formal recruitment trying to fit into 18 parking spots, especially when 21 live in the house, but that's another story for another day.

If land is not available, then a complete interior and exterior remodel of an existing structure. Take the time to make changes to the property before moving in, treat it like a build in terms of layout, modificiations, improvements, etc.

Is anyone else actively involved with a local Housing Corporation, or on a regional/national/international level in this area?

PhiPsiRuss · #9 01-13-2004, 06:35 PM

Quote:

Originally posted by AOIIalum
Is anyone else actively involved with a local Housing Corporation, or on a regional/national/international level in this area?

I am. Currently, I serve as the Director of Alumni Affairs Area Coordinators (3ACs.) The 3ACs work with the house corporations in their areas.

I was at a 3 day Phi Psi housing conference in Las Vegas this past September. It was the most productive fraternity conference that I ever attended, and not just because I left Vegas up on my gambling.

One forum was by a tax attorney who specializes in GLOs, another was by a specialist architectural firm, another by our insurance carrier, another by a gentlemen who is with the national fire marshall trade group, and one by a fund raising company.

What I learned is that it is so much easier, and cost effective, if you do everything from scratch. But only if you plan well from the beginning.

Also, for those GLOs who own a house, if it is dermined that replacing the house is cheaper than renovating, it is often easier to raise the money if the replacement structure is almost identcle to the older structure.

Tom Earp · #10 01-13-2004, 07:23 PM

Funny this should be brought up at this point in time!

The first 3 houses we lived in, 2 were rented and the third we bought. After 30 plus years for a huose built in 1895 and that many years of young men going through it it needed to die for safety factors.

We had this house on two lots a 1/2 block from campus, basically across the street!

We bought a bungalo house next to us so while it need s to go, We own 3 lots on a corner.

Yes, we are trying to build a new house with the floor plan set for the function that it is supposed to be set for. A Fraternity House. $$$ is a big proble, and if your Chapter does not have it, then dont try to build. If you Alum Base is not big enough or they are not willing, dont build!

Buying an old house and trying to retro fit is just as costly or more so than building a new house.

Building a new house with a sprinkler system does drop the insurance rate down some.

It just needs one hell of a numbers cruncher to make a comparison!

+ or - that be da question!

Russel, I am not sure who this guru is that you are talking about, but there was a loop hole passed to screw Us so to speak that the only money donated to a local Chapter was deductable only if it was used for an educational purpose, not just or including common area.

Jeeze what a crock of crap. We place students in houseing that helps the campuses and usually is cheaper! That ruling came from the houseing of U. Kansas by the way!

queequek · #11 01-13-2004, 08:45 PM

Of course land. Then I can design the landscape and the building specifically for the GLO (LOL, of course this is from a designer/architect/landscape architect point of view)

AOIIalum · #12 01-13-2004, 09:48 PM

Quote:

Originally posted by Tom Earp
Russel, I am not sure who this guru is that you are talking about, but there was a loop hole passed to screw Us so to speak that the only money donated to a local Chapter was deductable only if it was used for an educational purpose, not just or including common area

You're right, we are limited these days on what qualifies as tax deductible. I don't know 100%, but I believe that computers, libraries, contributions toward various educational presentations or materials, and possibly office space/study rooms may be all or partially tax deductible. Of course, consult with your national/international personnel and a qualified tax advisor before making such a donation!

Another donation/tax deduction thought...you may be able to make a donation through your GLO's foundation and earmark it for collegiate housing. Again, call your foundation contact and find out what may be possible. It can't hurt and may help.

33girl · #13 01-13-2004, 09:50 PM

Weren't they trying to get a bill passed for stuff like this? (i.e more leeway as to what was deductable) I think there was a thread about it.

PhiPsiRuss · #14 01-14-2004, 12:37 AM

Quote:

Originally posted by Tom Earp
Russell, I am not sure who this guru is that you are talking about, but there was a loop hole passed to screw Us so to speak that the only money donated to a local Chapter was deductable only if it was used for an educational purpose, not just or including common area.

The guru is Barbara Bromberg of Dinsmore & Shohl LLP. She is considered to be the preeminent tax attorney for GLOs in the US. She doesn't just know about the IRS code, she worked with the IRS to make them as pro-greek as possible. She is also used by many NIC and NPC HQs. Also, she joined CW when she was an undergraduate student.

I had to pull out my notes, but it works like this. This assumes that the house corporation is a 501(c)(2) or 501(c)(7) entity.

By common areas, I mean hallways, infrastructure, and rooms used for infrastructure (like boiler rooms.) These are not used to calculate educational usage.

If 70% of a house is dedicated use areas, and if that area is a 20/80 split, then you can apply that ratio to the other 30% so that the entire house can be calculated as 20% educational. If this is done, then 20% of any donation made to this house is tax deductible.

Valid educational uses include libraries, conference rooms, study rooms, and computer rooms.

From what she told us, if she is included in the project from the beginning, results for houses have been as high as 30%+ deductible. She got one project for a lodge to be around 50%, but that is unusual.

quillogold · #15 01-15-2004, 07:27 PM

In my sorority's case, we did buy an existing house and while it's been great having the house it's also been a big hassle. For one thing the sorority that lost the house in the first place (no we didn't buy it from them, we bought it from the school) won't drop the fact that we live in "their" house. It's begining to stop since we've now had the house longer than all the girls have been around, but it's still a pain. Plus the house is shaped like the greek letter of the sorority (i'm keeping names out of this because i don't want it to seem like i have a problem with these girls...) We don't have this greek letter so it really doesn't mean anything to us.

So yeah given the choice of land or house....we would have gladly taken land.