203k Renovation in Chicago- Advice/General Contractors
Hi people,
I'm looking for any and all advice regarding the FHA 203k Loan/ Renovation process for multi-unit properties in Chicago. If anyone has experience (positive or negative) i'd be curious to hear what it was like. I've spoken to a couple people that have done it and it sounds like a fantastic possibility. However, with the labor shortage I'm worried finding contractors could be difficult- does anyone have any referrals? I've done some basic research on GCs in Chicago, here are a few I've come across:
- Cobbelstone
- 4ever Remodeling
- Inland
- 203k Remodel
- 123 Remodeling
- Arete Renovators, Inc.
If anyone has any experience working with one of these companies I'd be very curious to hear how it went.
My understanding is that when doing an FHA 203k loan, you go under contract, have a walk through of the property with a contractor (or multiple to get different quotes) during which you very specifically outline all work that needs to be done with what finishes etc, have a scope of work drawn up, that is provided to the lender, the lender then gives the green light, as construction is underway, there are draws after certain bigger projects finish, an FHA inspector comes through to make sure its done, THAT inspector is who then writes up a check for the contractor after approval is given, this goes on until the work is complete.
This product sounds amazing because you can immediately gain a ton of equity, customize it yourself, have protection via the inspector to ensure things are done properly/up to code, and you can put 3.5% down on the entire thing including construction costs!!
Sounds great but I worry about not finding good contractors that may not have reserves, could drag out work, or walk out on the job.
This would be a first time purchase, and would likely keep it under 5% down.
Any and all advice would be much appreciated!