Sunday, January 25, 2015

Creating a Property-Specific Home Renovation Plan

Once you've found the perfect older home to invest in, you'll need to create a renovation plan that's property-specific. This is where a good real estate agent can use his experience as a Realtor and community connector. He'll be right by your side every step of the way during your home renovation by personally interviewing the contractors while bringing his longstanding people and references to you.

He'll help you find the right contractors who have strong experience in remodeling older homes and if you don't have a big budget, he'll find you a contractor who is resourceful and who has handled similar projects. A great contractor is someone who nourishes relationships, considers clients' needs, keeps them informed along the whole project and sticks to your budget. And when the contractor is strong, the contractor's subcontractors are as well. If something goes wrong, it's taken care of, and many times an experienced contractor knows how to head off problems before they happen.

If you have a Streamline FHA 203K loan then you won't need a HUD consultant and you can have up to three contractors.

You're eligible for the repair/replacement of:
  • gutters/drainspouts
  • decks/patios/porches
  • window and door replacements and exterior wall re-siding
  • septic and/or well
  • appliances including free-standing ranges, refrigerators, washer/dryers, dishwashers and microwaves
  • existing HVAC system
  • existing floors
  • remodeling for persons with disabilities
  • basement refinishing/remodeling
  • minor remodeling, such as in the kitchen that doesn't include major repairs
  • exterior/interior painting, including lead-based paint stabilization
  • weatherization, including storm windows and doors

For a Consultant FHA 203K loan you'll need a HUD consultant who oversees the renovation project from start to finish. It's the responsibility of your borrower to choose the consultant. During the inspection, the consultant determines what repairs are needed and then the borrower and consultant discuss what money to draw out to the contractors based on the amount of work completed. This loan is typically used for homes with repairs of over $35,000 or that require structural repairs for the foundation, well or swimming pool. There should only be one general contractor (GC), but there can be up to three contractors. Contractors get no money up front, and their fee is based on work completed.

With a Consultant FHA 203K loan you're eligible for:
  • structural alternations/additions
  • a new garage that's attached/detached
  • a kitchen/bathroom remodel
  • installation of appliances
  • swimming pool repair
  • plumbing/electrical modernization
  • install or repair well/septic systems
  • install flooring/tile/carpet
  • major landscaping/decks/fencing
  • handicap accessibility
  • interior/exterior painting
  • any improvements that are a permanent part of the property

There's a whole world of opportunity out there with home renovation loans. With a little research and education, your renovation can be easy and rewarding.
A good real estate agent doesn't abandon you after closing. He'll help you in every stage of the process.

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