New to Real Estate · Tampa, FL · Member since 2020 · 6 posts · 2 votes
First of all, glad to finally be a Pro member on BP. Looking to purchase a multi-family home (2-4 units) in central Florida using an FHA 203k loan to jump start my REI journey. I'm bracing myself for the rehab process and working with contractors as being the most challenging part of this process. Are there channels to find reliable contractors experienced in Leadership in Energy and Environmental Design (LEED) or along similar lines with investor/budget-friendly prices? The draw periods of aligning HUD inspectors to cut that check after a period rehab is what concerns me the most - paying a good quality contractor on time so are there any suggestions to play this out more efficiently (out of pocket, maybe)? And during inspections, are there particulars to pay extra attention to in terms of damages whom many have had bad experiences in?
@Christine Lai, my guess is that in the Venn diagram of contractors approved to do FHA and also LEED-certified the overlap is zero. Additionally, you will be adding no value to a small MFR by getting it LEED certified. Vet your contractors well, take the time now to understand the fundamentals of building science, and be clear about what you want done, why, and what you're willing to compromise. There are going to be compromises.
As far as education, check out Matt Risinger on YouTube, Fine Homebuilding magazine, Green Building Advisor, and follow
@Christine Lai, my guess is that in the Venn diagram of contractors approved to do FHA and also LEED-certified the overlap is zero. Additionally, you will be adding no value to a small MFR by getting it LEED certified. Vet your contractors well, take the time now to understand the fundamentals of building science, and be clear about what you want done, why, and what you're willing to compromise. There are going to be compromises.
As far as education, check out Matt Risinger on YouTube, Fine Homebuilding magazine, Green Building Advisor, and follow
First of all, glad to finally be a Pro member on BP. Looking to purchase a multi-family home (2-4 units) in central Florida using an FHA 203k loan to jump start my REI journey. I'm bracing myself for the rehab process and working with contractors as being the most challenging part of this process. Are there channels to find reliable contractors experienced in Leadership in Energy and Environmental Design (LEED) or along similar lines with investor/budget-friendly prices? The draw periods of aligning HUD inspectors to cut that check after a period rehab is what concerns me the most - paying a good quality contractor on time so are there any suggestions to play this out more efficiently (out of pocket, maybe)? And during inspections, are there particulars to pay extra attention to in terms of damages whom many have had bad experiences in?
Hi Christine - welcome to the Pro club! I can confirm that you're on the right track with getting started, because buying a small multifamily using a 203k loan is exactly how I got my start. I was able to secure a big chunk of equity on the deal, as well as nice cash flow right out of the gate.
Regarding contractors, it definitely can be a tricky process. But, if you cover some foundational concepts of picking contractors, you should be able to get a pool of contractors qualified to bid your project, and from there make your pick based on price/gut feeling.
The way I pick my contractors now (as well as how I did it when I did my 203k)
Start with asking friends and family for contractors that they highly recommend, and what those contractors did for them. You don't want just kitchen and bath guys, you want GC's that can run the entire renovation project.
Use your online resources like Angie's List, Home Advisor, Yelp, Thumbtack, etc. These sites usually have reviews and will be something work utilizing when picking contractors. You're looking for the best of the best.. not the fly by night guys. Your contractor must be licensed, bonded, and insured. Bonding is what's going to help your contractors be able to wait a few days for payment.
In my experience, my contractor received their check 2 days after the draw inspection. If your contractor can't wait two days, they're not who you want to work with.
You can also use your professional network. Ask your realtor, lawyer, home inspectors, etc if they have any contractors they recommend.
As for LEED certification, what's the need for this? This is typically a certification held by architects and designers more than contractors, especially small residential. I'd say you'd be hard pressed to find a small-time contractor holding a LEED cert.
I'm likely not at the stage that I can entertain the idea of greener alternatives into my first rehab, which is fine. I greatly appreciate the resourceful feedback. I'll look into Matt Risinger and I plan to utilize Angie's List as well as my professional circle for any suggestions (my family and friends have zero connections with GC). I'll be sure to hire a qualified inspector first and foremost to give me his/her two cents as to what work needs to go into the property before this dance begins.
@Christine Lai I’ve had great luck with calling supply houses to connect with a tradesman. Don’t think about LEED, it’s like asking for bids to do a metal gate at your house and you want their shop to be ISO certified.
@Christine Lai, lets connect on greenhabbing, its the direction my company is taking...you don't necessarily need LEED certified contractors but there are elements you can incorporate into your rehab, lets connect and exchange ideas.
Since I've posted this thread, I've found a few potential alternatives. If my rehab actually ends up with a bit of "greenhabbing" I'll be sure to share.
@Christine Lai so Contractors are not really LEED certified. They build what they are told to build. That is why there are plans. Some do it better than others but that has nothing to do with a “green” building. For example, you can buy a toilet from Home Depot that comes from China. That is not environmentally friendly. You need to buy a toilet that is manufactured within 500 miles of the project site to be considered environmentally friendly. There are many categories but the point is you can’t just tell someone to go buy a toilet. You have to tell them from where.
Most small projects there is no need to go to crazy. The big factors are insulation, windows/doors, light bulbs, leaky faucets, and the right sized mechanical equipment. Start there and you are going in the right direction.
In addition to some of the other site recommended check out Building Science. There is a lot of good stuff and when a contractors tells you, “this is how we have always done it” then you can tell them they are wrong and back it up.
