All Forum Posts by: James H.

I check with the lender. There was no 50% disbursement. Just the one draw. I’ve got some contractors coming in the next few days to hopefully take over.

Hi Diana. The lender.....I hesitate to say recommended but, they mentioned this GC was an option and he was the cheapest and I didn't see many warning signs at the time. We have done 1 draw so far recently for services rendered. Are you saying that the GC has already received a larger sum of money for his material costs? That's deeply concerning if so, I will have to look at the email chains going back and forth a bit more to confirm this but now that you mention it, this sounds familiar. 

We are at 7 months now. What happens after that 9 month limit you mention? Property is definitely not habitable, so I have been dutifully paying the mortgage. Unless you meant uninhabitable?

Thanks for the advice Charlie. The blue vessel is in the basement near the water tank and it had a small moat around it to contain the sweat, I imagine. 

Very helpful advice and information everyone, thanks for the support. 

That is an interesting point. I'll ask the 203k consultant what he thinks about making me the GC. The main issue I see would be in fronting for the expenses since its been a super tight budget thus far. But this is literally all my GC needed to do, was hire people for the work and do the work. I have another contractor in mind. I will see if he can come on and agree to what I need done and can work with me doing some of the work myself. Creating my own budget proposal is an interesting idea you bring up, I will see if that works. 

The lenders made it out like it was a huge process to fire the GC. But, it needs to happen I think. I have been patient and made completely reasonable requests. One question I would have though is since there is a 10% hold back, how would that be handled if the GC was fired? The timing isn't bad either, first draw complete, he shouldn't be out additional money....its a fair time to part ways and start anew. 

Thanks for your help. The well system looks like a big blue tank in the basement with a motor. The pipe goes into the wall and outside. The yard has a few pits on the hillside where the pipe looks to be going to. That might be where the actual well is. I picture a well as one of those old stone ones with the bucket you drop in. Ha, so clearly this is a buried and sealed unit but it would be helpful to know where the well is dug since they will be digging around the property soon for the sewer and foundation. The property abuts a stream and its very wet, so I doubt it has to go very deep. What should I know about wells? I added this to the end of the list some time ago and haven't looked at it.

This is my first project. I think any pitfalls I would have experienced with real estate after several years has been condensed into the last 9 months. At this point I can see certain things that if I open them up, will delay the project. I think I have the bare minimum exposed now and will deal with the rest once we can call this done. I checked in to see what needs to happen for a 203k to be finished, so then I can refinance, and its basically "livable condition" per the township occupancy minimums. A far way off from where I am but I consider the sewer and the foundation to be the hump, the rest should be relatively basic stuff. 

I decided to jump into the deep end for my first home purchase project, it is much deeper than I wanted..... I purchased a property for 129k in August of 2018. It was in pretty banged up shape but didn't look outrageous to replace. The total loan amount is around 298k including contingency to get it all done. From the get go, the primary focus was on tying into the sewer system since it has a septic tank now, which is failed. I finally got that process in motion and have the permits from the state EPA for work to start on that once the engineers wrap up. The expense for just that will be somewhere around 30-50k (engineers, water crossing permits for the stream, excavation, old tank removal, more permits, etc.). The contractor showed up for a township meeting and sent in a few checks to keep things moving along but didn't do much else in the way of coordination. I have been project managing this whole thing. ARP is somewhere in the 300-400k range. It's a special parcel of land because of the water way and community and the school district.

I'm pretty handy with carpentry and some masonry so I got to work on the rest of the house in the meantime while the sewer saga played out. There is a lot of smaller scale carpentry work that needs to be done, which I have been doing. But....the way the stucco was done originally, in the 60's means that they didn't use a weep screed and around the entire house the sill plate, rim joist, and at least some of the joist ends are toast because of the water that got into the walls and couldn't drain or vent anywhere. The foundation is hollow block and also in seriously bad shape, which was hidden behind finished basement walls. These oversights are due to my inexperience (which I am wising up to pretty quickly) and incompetent people who have been working on it. The 203k consultant didn't find the foundation a concern at all and mentioned smearing concrete over foundation cracks to fix the one that was visible. In reality, and knowing more now, there are vertical cracks near the i-beam, pushed in walls, horizontal cracks, a lack of a sill plate in some locations, etc. I didn't know and they didn't know, and there was much hidden behind some finished basement walls. It has been a massive oversight....I consider this my 1 year accelerated renovation PHD program. I digress....

My general contractor is very poor at responding/communicating and I deeply regret not doing more about this sooner but since August this is what he has done:

• replaced the shingles
• replaced the heat pump unit
• sealed the flat roof with elastomeric coating, but got the silver material all over the dark brown gutters so it looks horrendous
• Replaced the outside A/C unit
• Replaced the well motor/pump, but no further testing of the well or plumbing has been done.

This is what I have done (keep in mind, I have a full time job and also run a small side business):

• Built a new front door from scratch (it was pointed and not rectangular so no off the shelf options). Had to get custom locks and learn how to do that since the locksmith wanted $1500 alone because of the odd dimensions and backset
• Demoed the interior and single handedly filled two flat bed dumpsters, need atleast 1 more for the trash still present 
• replaced the wood siding and framing for one of the balconies, will be laying down the epdm waterproofing this week
• Bought a few french doors from craigslist, which happened to be the exact size I needed
• installed a new cross beam section (old one was rotted and sagging) above the old 4 panel french doors
• I also removed the stucco from most of the house and am putting up new plywood and homewrap on as much as I can, keeping in mind the bottom portions will need to be replaced due to the sill plate/foundation issues
• Replacing the fascia as I come to it with PVC Azek
• I also have some tile, toilets, chandelier/lighting, and various other components I need but have not started to use yet. Purchased from Habitat/goodwill to save costs
• Removed vines from the entire house and cut down probably 10 trees that were encroaching
• And I have a pile of scrap metal I'll deal with later

What's on deck to complete the project:

• replace the sill plate
• repair or replace the foundation
• need to buy and install several french doors
• various bottom plates will need to be replaced
• entire kitchen
• bathrooms are mostly ok and I might just leave them to "finish" the 203k, then remodel later
• remaining stucco needs to be removed
• new plywood siding, new stucco
• upgrade the electrical box and have the wires looked over in the house
• Plumbing needs to be addressed
• drywall

What's clear to me is that the contractor is either a con-artist or completely incompetent (leaning towards latter). He always mentions all of his other jobs like mine is an afterthought despite this being a massive project, he gravely misstated the scope of. I also am deeply concerned about him tackling the foundation since when he says "he will have a guy look at it," I read that to mean this will be really amateur work and in no way will it be done correctly. This is unacceptable. 

The two main hurdles have been the sewer system project and the new one is the foundation since I can't really finish the siding/framing until that is squared away. I have a foundation expert looking at it this Saturday and I will find a way to pay if that's the road I have to take. 

Since this is a 203k, the GC should be fronting the money for all of this, which he has been for smaller scale stuff. They he files for a draw periodically as milestones are reached. But, I think that for the bigger more expensive projects he is not able to do so, hence the slow progress of the work and his fixation on other projects. He even mentioned talking to the lender so they could issue the money to pay for the job instead of him, which as far as I can tell isn't kosher. So far, we have completed only one draw for about 10-15k for the work he did to date.

I'd like to fire him but I am concerned that he so severely underbid for this project that no one else is going to be able to get it done. I've been filling this gap by doing the work myself, which works for some things but frankly I am not going to fix the foundation myself, I will leave that to the pros. 

I want to do the work too, just not all of it: nothing you need training for or professional equipment, which IMO rules out me doing any plumbing, electrical, foundation. I'm basically a novice carpenter. I am finally accepting that this is way beyond where things should be and decided to tell my story and seek advice. Every time I have complained to the lender, the 203k consultant, or the contractor things seem to move briefly but then it dies again and we are back to nothing happening.

Some questions:

• Is there a legal case against the GC or consultant, is that worth it? What are the pros and cons and if the pros outweigh, when to bring any action (now, after project completion, etc)
• Am I at risk of losing the property since its not going to be done any time soon and as I understand 203k's, they should be done within a certain timeframe....now by my estimation. Is there a time limit at which point the bank takes some kind of action?
• I have been on time with mortgage payments, which because they are on the full value of the loan, I'm paying for an expensive house
• Is there a risk that much of the work has not been done by a licensed professional contractor but by me instead?
• What are the other risks?

Hello. First time property buyer here. I got a solid deal on a property and am going to do a 203k. the property has been sitting for many years and needs significant repairs, many of which are out of my personal diy ability and some are not. But, here is where I’m struggling.....

The HUD consultant just released his initial project scope document with estimate. There are things I don't want to do/can't do myself like the roof, stucco work, and sewer service among others. I'm happy for contractors to handle that. Then there are things in the report that I was rather hoping to do myself over time. This will be a slow flip for me since I need to live there for a year. So when I see a kitchen renovation listed and it's estimated at over 10,000 I think to myself, why am I going to go into debt to pay for someone else to do something I want to do over time and at my DIY cost (I'm skilled with tile and woodwork). Same goes for bathrooms.

Also in the project estimate was yard work, small tree removal, and vine removal. I was once a professional landscaper and have the tools still to easily handle that. 

The walls aren’t great looking but this is yet another thing in the quote I could do myself because apparently they need to be painted.

The rock driveway is channeled from cars driving on it so he wants to fill it in with rocks. 

And even a few 6” holes in the drywall I’d be fine covering with plywood for the time being but he wants to have those addressed by contractors.

My plan here was to buy a cheap house, use the renovation money to get the house in good/ acceptable condition overall, and then spend the next year fixing the smaller items i can do myself. 

The consultant mentioned the house must be Sound structurally, Secure, and Sanitary.....the three requirements of FHA. I feel like there are liberties being taken with this definition in my case but I don't know how to approach it with the consultant.

Every time a contractor has to do something i can do it costs me more. I also was hoping to get into the house and close and then just tinker over time but it seems I have to get appliances and dump a truckload of money on this now and i was hoping to get the pros to do the big stuff and leave the rest to me. 

Need advice, thanks