Well you see how small it is! But what it came down to was if we want to stay on the street we love and keep hoping for a resale of one of the larger homes, look for another house elsewhere (more expensive with all the selling and Realtor costs), or wait patiently until we can do a renovation to this house. We always said if we win the lottery we'd probably just tear this one down and build fresh since we love our neighbourhood so much but it just hasn't been feasible. Never, until our neighbours did a similar renovation to their 600 sq ft house. They too had a family of 4 and saw the potential in their land so when we found out how much their addition cost it got our wheels going. It WAS possible for us to do it with our current financial state!
My husband is a full time, long serving sailor with a promotion in the near future and I do daycare so I can stay at home with my boys while they're still little, so combined we feel it's doable. But feeling it's doable could be setting ourselves up for disappointment so a few months back we had a visit with the bank to crunch the numbers. Good experience, she seemed quite pleased that we weren't spenders and that we use our money for really only future benefiting plans. The next step is when we have the estimate for the whole job we'll contact the bank again who will then send out an appraiser to find out the house's market value as it is today. With that number we can borrow up to 80% of it's worth, something we don't want to do as we don't need or want big mortgage bills. We have our $200000 number in our minds and are comfortable adding that to our debt but not much more, hence the anxiety over how much it's going to cost so we can do the garage. At least our car payments are done in May so that frees up some money.
So that's how we came to begin the transformation - a huge need/want for more space, a huge desire to stay on the street we adore, full knowledge of how much real estate sells for (ridiculous) and the confidence we've made the right financial decision.
Maybe we should just move to Australia.