All Forum Posts by: Steven Gesis

Hi Max, yes you can do some things yourself, you just need to know how to properly set the stage for them. First off I have been a part of many 203k renovations for clients as we have a dedicated construction arm and team that works with clients using renovation loan products. You can consider using a conventional renovation loan, however, you will have a larger downpayment but no PMI and it is not as strict for repairs required/mandatory repairs.

Finally, the meat you are looking for, although you cannot do the work yourself, here are some things you can do:

• Contractor can repair walls and prime only areas of repair, you can paint the interior, the rules state that the walls need to be whole, they do not need to be uniform and painted, they have to simply be free of defects.


• You do not need to have anything more than an operational kitchen or an operational bathroom.


• You need to have working mechanical otherwise they will just do a larger contingency


• Exterior work can be done yourself unless they are not in compliance with HUD


• You can always go with a very low grade material for floor covering just to get through inspection.
Lastly, some food for thought, unless you do not have the capacity in your budget because you are restricted by the loan or your DTI/Income, money is cheap and if you can have someone else do it now and you can place your time in your core job to earn more to be able to buy more, why not just let them do it. Currently on a 203k the rule of thumb is that you are lending at $5 / $1,000 - for very little you can have the lender pay for this, take the depreciation over 27.5 years, keep your cash and your time. Just a thought! Inbox me and I can send you a guide we have for consumers that may better assist you in navigating your renovation loan.

Sorry forgot, if you go to 203k contractor search you can search your area for a competent and knowledgable contractor that can help you cruise this and work with you because they are familiar with all the rules and administrative elements associated with the loan requirement.

#TeamTurnkey

Welcome Matt! Not from Lakewood, currently doing a conversion for the City of Lakewood, they are renovating a duplex and converting to a single on Dowd Ave.  Sounds like you are on a greta path to some financial success and wealth building. The duplex scenario is an ideal starter home for investors just starting out, especially if you have the ability to live in it. The more information you gather the more fruitful your future. Please feel free to inbox me we can grab a cup of coffee sometime in Lakewood if you like and discuss some of my experiences and your goals, always willing to assist and share knowledge.

#TeamTurnkey

 I see this is getting a little heated, I thought I would jump in and offer some insight myself, while I see everyone is throwing around laws and rules.

#1 - In the State of Ohio in order to operate or manage someones real estate property you must be a licensed brokerage or broker.

#2 - State of Ohio does not issue licensing to General Contractors, no such thing. I would highly advise anyone seeking a reputable contractor to request pertinent information from the contractor : Copy of General Liability (you can even have it setup for you to be the Certificate Holder), Ohio Workers Compensation, City Registration where the work is being performed, warranty information, contract, defined scope of work, W-9, references client and professional). Now, trade specialties such as (Plumbing, HVAC, Electrical) are all licensed trades in the State of Ohio, they should be able to facilitate a copy of the license, you can also go online and check in a state database the current state of the license. 

#3 - In the State of Ohio home inspectors are not licensed, however, you may want to consider getting a Home Inspector that is a registered HUD Consultant or a NACHI registered inspector. Just like a GC you can request some pertinent information in advance to get a gauge on experience and knowledge. You may ask (Insurance, W-9, References, if they worked with investors before, a copy of a report sample)

You want to go through this vetting process, you want to be able to utilize the experience of the contractor and the people around you to insure you are capturing all there administrative actions insuring you are able have as many controls as possible. A competent and experienced contractor will pull all the proper permits first, they will not fool around as they want to retain a good reputation with the municipality if they expect to continue working in that respected city.  Call the building department and ask if they have heard or know of the contractor you elect to work with, believe me they know the good and bad ones. Its not a secret to anyone that a junk contractor or one that is looking to cut corners are all well monitored or not even allowed to operate in the city.

Finally, you do not want to begin any process with anyone that is seeking to evade or circumvent rules and manipulate the system. Whats wrong with the system and the controls set forth by State Law or Rules, they are designed ot protect consumers. My advice is that if you cannot figure out a way to do it the correct and legal way, then you are not setting up a future of success and growth. You will always deal with some challenges and eventually this will become a very laborious and seemingly bad experience. I encourage you to do things the way they are supposed to be done, in a professional manner that will allow you to build long term wealth not just make a quick buck.

#TeamTurnkey

 I would have to agree with Bill, you should highly consider a duplex, live on one side and rent the other in the mean time. Definitely get a renovation loan, it is cheap money and it will allow you to renovate the home using someone else's money. It is a win-win for you. Inbox me for more info.

Josh welcome! I am not from Oklahoma, but I am a real estate addict, I was in the healthcare world up until 7 years ago, have not looked back since. I am an avid investor and now hold a substantial SFR portfolio. We operate a Turnkey business in Cleveland, Ohio, however, the following theories I think hold true anywhere in the country, perhaps even the world.

• You want to connect yourself with experienced people that are familiar with the local market or the immediate market you are considering
• Cheap properties will inherently normally carry a little higher risk
• Do not cut corners on your renovations, you do not want to deal with chronic maintenance
• Be patient when placing and screening tenants, the better quality tenant = longer stay/less turnover, timely payments, care for property better
• You want to find a reputable and sophisticated licensed property manager = huge weight on the success of your hold SFR

Hopefully this helps you get moving in the right direction, if you want to chat or have any other questions feel free to inbox me or call me.

Good Luck! #TeamTurnkey

 Hi Sam, cannot attest for Cincinnati or Columbus, however, Cleveland is certainly my domain, I am very familiar with the landscape, various neighborhoods, expectations associated with area and price range in NE Ohio. 

We do not have an issue with contractors on our end, this is a result of being in the marketplace for a long time and having our own in house construction department. We renovate a little over 200+ homes a year between our private clients, SFR investments and multi-families/light commercial. Contractors are inherently complex, one of the most successful tactics we implore to capture good talent, is to pay them a fair wage, not market rate and not a rate that they suffocate with the abundance of work and get disengaged form the project, its a tough balance but it can be done. Certainly can say without any hesitation you get what you pay for, so do not fool yourself. Its worth every penny to pay a fair rate and get a good long term product, versus a continuous maintenance disaster.

Yes, we have basements, very manageable and great recreational/storage space. You want to look for the obvious issues first: (Grading issues, gutter & downspout condition), if you have an excessively wet basement, you can do some interior waterproofing, worst case scenario you may need to implement some outside waterproofing. Your home inspector should be able to give you a gauge on any issues. This is not necessarily problematic everywhere, but you want to be cautious.

Radon is not everywhere, certain areas more than others, however, majority of NE Ohio you should not need to radon test.

It gets cold fast, need to make sure you are keeping your home warn to prevent any froze waterlines and you do not want to winterize or depressurize the lines if you do not have to.

Cleveland is a great place and if you think you are interested in investing in Cleveland, give me a shout, gladly discuss further with you some options and things to consider before or after your purchase.

#TeamTurnkey

 Hey Andy, I think everyone made some great points, depending on where you are and the profile of the area, you may want to consider installing a T&G Laminate, fairly inexpensive, easy install, scratch proof and will be much more sustainable for tenant turnover. Your short term and long term costs will be much less as the aesthetic of the floors will last much longer than a floor refurbishing.  This is one side of the argument. On the other hand, we do sometimes implement both in homes, we do try to retain and refinish existing hardwood if the floor is in good condition. However, if you are considering installing all new flooring because your hardwood is not existing or in poor condition, I would highly consider just a laminate good quality floor instead. I would not go with the pine, it is thin, softer than oak and will not be sustainable for refinishing multiple times after turnover like oak.

Much luck #TeamTurnkey

Joshua, interesting question, a "good" FHA 203(k) consultant is not easy to come by, I do not know of any websites that will recommend anyone, however you can check out HUD 203k Consultant Search this is the official website for 203k consultants. I would advise taking someones recommendation though, because these can sometimes make or break a deal, a bad consultant with bad experience or lack of experience and does not have the proper technology to complete this task can be a nightmare for you and the client involved. Local knowledge will win in this case. 

Good luck!

 Hi Eric-

I know I am not in your immediate area, however, being well versed in this subject matter, I would suggest checking out 203kcontractors.com excellent resource, you should be able to lock down a competent and capable contractor to meet your renovation loan needs. The resource vets contractors and makes sure they are familiar with the administrative compete as well as reviewing financial to insure the contractor can sustain the project. You should be able to take advantage of the more sophisticated contractors economies of scale and understand of the process. I can assure you that you will have a much more favorable and reliable experience versus savings a couple bucks on a chuck & truck guy. Consider the magnitude and scale of your renovation, you will need someone who can meet your timeline constraints as well.

We operate a private construction renovation department, our team has been doing 203k and renovation loan construction for more than 5 years, we are certainly not only well versed but logistically prepared to meet the needs and timelines of these projects. Considering our immense  track record in the Cleveland, Ohio area and being the largest volume renovation loan contractor in our region, we deal with many clients who have experienced failures and required us to come in and complete, because the contractor was not capable of managing the administrative and financial burden these projects require.  While clients that begin the process with us and go A-Z, no matter the type of project, streamline/limited or full/standard have a smoother and fruitful experience and are able to enjoy the house they have worked with us to convert into a home.  If you ask a good experienced lender, they will tell you the same, the same holds true for well versed and experienced realtors in this space as well.

Finally an experienced 203k contractor will be able to get you processed and closed significantly faster, as they are equipped to handle the administrative burden set by the lender:

• Registration, Bonding & Permitting
• Proper Estimate Structure
• W-9
• Insurance & Workers Comp.
• EPA Certification
• Financial Capacity
• References & Past Performance
• ...... much more... varies by lender

Well hope that helps, I really encourage you to visit that resource and simply call/email. 

Good luck with your renovation! If you need any assistance please feel free to inbox me.

 We have a strong Australian presence amongst our clients, currently as you stated that marketplace is not as active due to the currency exchange. 

Thats the 100% truth, some of these so called Turnkey providers and/or marketing companies really grossly misrepresented various real estate deals, we still get calls from Australian Real Estate investor that have distressed assets or assets in very undesirable areas that were doomed by by operators. I can reference in the past month we have been working with clients who spent in excess of $400K each, on who knows what. Trying to assist in constructing a basic and swift exit strategy if one exist. We will try our best, some assets are beyond help sometimes, I am afraid at least one of these are in that category.

Thats really good I like that "financial sociopath"