What loan options do I have to rehab building violations?

Question

Hello BP family,

I recently purchased a home with an FHA 203K loan. Rehab portion of the loan was to repair some interior work worth up to $65k. unfortunately 1 month after closing, I had one of the tenants that was getting evicted complain to the city and I ended up getting a bunch of building violations.

These violations are to fix porch, roof, and masonry work. bids that have received are totaling up to $150k.

I'm looking to see what options are recommended to finance that additional rehab work needed to clear violations.

Jonathan Klemm · Answer

You're the man @Paul De Luca - Thank you for the tag sir!

Hey @Reuben Pena - Man I feel you as well - I have dealt with city violations personally and for many clients. Financing another $150k seems like a pretty heavy lift...how big of a building is it? Do you still have a lot of equity in the building?

Did you buy the building with the violations or did you get cited after the tenant called into the city of Chicago?

My best recommendation would be to find a partner to buy into the building. To be honest, you could probably fix the violations over time...there aren't any fines for the violations and they usually can allow you a lengthy time to make the repairs.

Either way I'd be happy to connect off line of the forums and talk through the violations to see how we might be able to help!

Paul De Luca · Answer

@Jonathan Klemm

Mike Grudzien · Answer

Reuben,I don't have an answer, but I feel for you. I had a slightly similar situation a number of years ago. I hate when thing come up after the fact and mess up a smooth running plan. Just wanted to give you some encouragement to hang in there.Mike

What loan options do I have to rehab building violations?

What loan options do I have to rehab building violations?

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