said on November 7th, 2008 categorized under: Home Repair
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One of the greatest challenges for any first time investor or homeowner is finding reliable handymen and contractors for repairs or home improvements. And while I am always happy to pass along names and numbers of service people either I or my clients have been happy with, sometimes I don’t have the right person for the job.
While
Angie’s List is always a viable option, a client called this morning with what may be a wonderful alternative;
Service Magic.
Like Angie’s List, Service Magic lists and works with reliable contractors who they’ve screened. They also ask customers for reviews of the services performed which they then make public.
Where they differ, however, is their web site asks you for a description of the job you need done. They then figure out what type of contractor you need, then have up to four pre-screened contractors who do that type of work contact you.
My client reported she was thrilled by the caliber of people sent (which included
Sears ), the speed in which they contacted her and the quality of work done.
It’s always nice to have these kind of resources on hand.
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One of the biggest hurdles buyers face when considering a foreclosure property is the amount of repairs many require simply to be inhabitable. After making the down payment, where does the cash come from to replace the blown radiators or copper pipes, or even to simply paint?
It’s hard to believe, but the FHA is coming to the rescue with what has been christened a 203K Streamline Renovation loan.
Basically, the product is for owner-occupied 1-4 unit properties. It allows buyers to include and finance the cost of up to $35,000 in repairs right into their mortgage.
The loan is included in a single mortgage on the property, which can be for up to 110% of the value of the property after the repairs have been completed. For example, if a property is purchased for $100,000, and after repairs are made an appraiser feels it will be worth $120,000, the buyer can obtain financing for the repaired value.
What can be included? Almost anything: heating and cooling systems, plumbing, appliances, painting, kitchen remodels and a plethora of normal improvements one would make to a home.
Is it only for the neighborhoods where revitalization projects like City Living are an option? No. The loan can be used anywhere.
There are only a couple of restrictions to the loan. Basically, the improvements must begin within 30 days of closing, and be completed within six months.
The work must be performed by licensed contractors. The contractor is given one half of the money when the job begins, and the balance upon completion. The FHA wants to be sure the contractor is legitimate and isn’t going to run off with the funds without doing the work. Therefore, they do require the homeowner to use a contractor they’ve approved. Home Depot, Lowes and Sears are all nationally approved contractors.
These loans should help a lot in getting some of the foreclosure properties sold. So why isn’t everybody aware of and using them? Nobody knows about them.
While others are working on it, to date, the only lender in the Twin Cities who offers the 203K Streamline Renovation loan is Wells Fargo.
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Over the last several years, it seems as if almost everyone I meet is, on some level, addicted to HG-TV. We’ve all watched those shows and now dream of finding a fixer upper at a steal of a price. We think, “with just some paint, carpet and of course, stainless appliances…I could turn a $20,000 profit for just a weekend of sweat equity.”
OK, here are the facts. In the peak of the housing market I saw that happen…once in a while. Most of the successful rehabbers, however, were professional contractors; with crews. It was the only thing they did for a living.
So many of the foreclosures on the market are half-finished rehabs. And it doesn’t take a novelist to imagine the story behind each one. Someone bought it to flip it, and it took more money and time than they ever imagined.
In spite of this, everyone still has the “Flip This House” mentality. Even with duplexes.
The other day I showed four duplexes. All were either short sales or foreclosures, with some level of deferred maintenance. They ranged in price from $114,000 to slightly less than $260,000. All were in different, but equally terrific locations.
The least expensive was a converted single family home with some decent turn-of-the-century woodwork. As with most of these properties, the upstairs unit lacked a true living room. That unit also featured a makeshift kitchen and the most unconventional, skinny bathroom I’ve ever seen. The basement had one enormous octopus gravity furnace. And the soffits on the exterior of the home had clearly been converted to squirrel condos.
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One of the questions I am most frequently asked by people considering purchasing their first multi-family property has to do with plumbing. More specifically, the toilet.
It seems the biggest fear about becoming a landlord is there will be a phone call in the middle of the night that a tenant’s toilet has backed up. And it will be up to the landlord to fix it.
First, I have been a landlord for over a decade. And in all those years, the only time I ever had a middle-of-the-night plumbing call was when a water heater actually burst and was spewing water everywhere. My inconvenience? Calling the plumber and signing the check! (It was the least I could do — my tenants were buying me my property after all.)
When it comes to toilets, however, a plumber charges too much. And, here’s a tip: they’re really, really easy and inexpensive to repair.
I had zero experience with fixing them prior to becoming a landlord. But I’d had the good fortune of stumbling across Home Depot’s book, Home Improvement 1-2-3. It had pictures, well, more accurately, how-to cartoons of almost every conceivable home repair or improvement. I took that book with me everywhere: propped it up on the back of toilet tanks, crawled under sinks with it…you get the idea.
The good news is, Home Depot still publishes it. The bad? No more cartoons. Just pictures.
And, if Home Depot’s actually closed, there’s always www.fixatoilet.com. No kidding.
One of the greatest challenges for any first time investor or homeowner is finding reliable handymen and contractors for repairs or home improvements. And while I am always happy to pass along names and numbers of service people either I or my clients have been happy with, sometimes I don’t have the right person for the job.
