First rental income purchase

1 Reply

I just started the purchase  process  for a 2 flat building in Chicago... I have a 203k rehab loan and was told that I need to find a license contractor to do the work... All of the major  system  are in working order and the place just need cosmetic work in the kitchen  and bath......I would like to do the work myself is there any way around hiring a contractor or ways to cut the cost!

I think what you are looking to do, the bank will not allow. The bank requires a licensed contractor so that there is no fraud with the repairs, and so that if they were ever to foreclose, they won't have to worry about whether those repairs were done to code or in a workmans-like manner. The bank will escrow the repair funds separate from the house purchase and then distribute them directly to the contractor upon satisfactory completion of the repairs. They want someone competent, licensed and with a demonstrated capacity of successful prior projects to perform the repairs such as gutting a bathroom and kitchen using skills like plumbing/electrical/tiling and basic carpentry. You will also have to rely on a contractor or 203k consultant to estimate the total cost of the project in advance of  getting the loan. Your best bet is to shop around and get bids from 3-5 different contractors to find the best pricing and experience for the job so you get a quality job done and maximize your loan dollars. Use ready to assemble (RTA) cabinets at lower cost if possible and other things and control the types of materials they use for your project so they meet your expectations for quality and price.

http://203khomeloanrehab.com/203k-loans-do-it-yourself-fix-its-not-always-allowed/

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