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Listing all posts with label 203k consultant Fort Pierce. Show all posts.
  1. Can I build a detached garage with the 203k program?

    Yes, and No
    Yes, you can if there is no other garage on the site. If you do have a garage on site, then the new garage may be considered a luxury item and thus not be allowed.
    If you have a home that just needs a garage to be complete, build one with the FHA 203k, no problem. If you have a two car garage and want to build a new detached garage too, No Can Do. You can build a detached garage if you want to providing there is no living area over or attached to that garage structure.  If there is to bre an in-law unit above the garage or in any way attached to that garage, the new garage must share a wall with the existing structure. In 1994 we were taught that we could attached with breezeway but that is no longer the case. The guideline is being interpreted and misinterpreted to meet the current regime. Why do I say misinterpreted? Simply because they still think "only 5 draw inspections can be financed into the loan" which other lenders interpret means no more than five draws are allowed. 
    That part of the guideline actually states "On a project of $10,000 no more than five draws are allowed". They all quote the last half of that sentence but clearly by any rational person's interpretation on a project of $250,000 in construction maybe there could be a few more.

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality203k software for consultants to speed up the underwriting process..

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug

  2. Create inventory to meet your clients needs.Single story home

    What I love about this business is that we see a different house or two every day and watch it as it transforms to meet the buyer's expectation.

    Yep, that is my Chrysler 300 in the driveway. 

    into a two story home

    This is the "after" scene of the same house. Nice neighborhood but there were no homes in that neighborhood that fit this family's needs. So they added SF to the home to get the home they wanted and in the neighborhood they wanted.

    When inventory gets low this is a viable solution to many home buyers. 

    This can make the difference in an average Realtor and an exceptional Realtor. Providing your client with the home they are looking for, even when it isn't readily available. 

    You have to be looking at your inventory differently than you may have ever looked at it before. This is why I enjoy working with "Rookies" as they aren't "set in their ways" where they can't see the potential. 

    In all cases the work happens after the close of escrow. The Realtor gets paid, and goes to the next buyer. The construction starts and we stay with the buyer to the end of the process. We are happy to copy you on the progress photos if you like so you can stay in tune with the progress and create a portfolio of before and after photos. If you want to do that now to help you get started feel free to request photos for that purpose. We have thousands of archieved photos for you of homes we have completed. 

    REO Realtors, provide us with addresses of your hardest to sell properties and we'll give you some marketing ideas to help you sell those unwanted properties. We can even do manufactured homes with some minor stipulations. Even if they were built prior to 1976? That is the question isn't it?

    POSTED BY

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality 203k software for consultants to speed up the underwriting process..

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug
    T
    his is a reprint of my ActiveRain blog post earlier this date 9-8-2015


  3. The following story is NOT about any one lender as there are a few out there that do this... I had one that ordered a "feasibility" each time he really wanted a full consultation. He will never change.

    Recently a lender hired a consultant and asked the consultant to call the client to set up the appointment. The consultant called the client to make the appointment and indicated he would need to pick up his fee at the time of the inspection and it would be $729 which included the mileage fee based on the projected construction cost. This is a typical fee for our services btw.

    The client proceeded to tell the consultant that the lender told him it would only be $400 and they would bill the balance to the escrow if they decided to move forward with the project. If we move forward then the rest of your fee would be billed to the escrow and you would credit the $400 paid for the feasibility report (3-5 pages) to the full report (25-30 pages).

    The first problem is that the lender failed to share this little arrangement with the consultant and get their approval. The second problem with this is that the lender had no business discussing our fee payment terms and what we might bill to escrow as they aren't required to help us get our money in the event the client doesn't pay as agreed without doing so in advance. It makes us all look bad.  The guideline is clear that the consultant is repsonsible for collecting their own fees from the borrower.

    In any case, the client was told that they just needed a feasibility report at this time.  


    Lets step back and look at this from the lender's prospective

    1) Lets order a "feasibility report" and see if this project is even doable... [sounds good for everyone]

    2) If it is feasible to move forward we will order the full consultation [Also sounds good for everyone]

    3) If it dies here the client is only out the $400 feasibility fee [Good for the client too]

    Problem for the client

    1) The feasibility analysis is a very quick run through the property, NOT a home inspection. This takes right at 30 minutes to conduct the actual field inspection. We are just looking for the deficiencies to bring the property to the FHA MPS {Minimum Property Standards]. This is a "tool" that helps with the negotiation of the price with the seller.

    2) The client may want more than this, the client may want to know how much it will cost to add the new kitchen and bathroom as well as to meet the MPS. This makes it a "consultation" and it is no longer a feasibility. This is fine but changes the game plan.

    3) A true feasibility report, by design, is "INSUFFICIENT" to solicit bids. If you give the client more than this it is the consultation/home inspection/full report and no longer a "feasibility" and the consultant has earned his full fee. Some lenders have been purposfully calling a "consultation" that includes a property inspection report and bid specs a "feasibility".

    4) A feasibility report is a separate product and used ONLY to help with the negotiations of the sales price when used properly and benefits all concerned.

    5) If the project is a viable project and looks like it will fly there is no need for a "feasibility" in fact it wastes time and slows the closing.

    6) What we do different is to make the full inspection, if upon that inspection, it is found this project is not feasible, we flip it to a feasibility and write the limited report so the sales agent has a tool to renegotiate the price and then we charge the lessor fee. But we have had the time to actually inspect the home more fully and now have a much better idea of what is needed.

    7) If we go out to do a feasibility report and run through the home quickly make the report and then the full consultation is required, It will require another more extensive inspection and thus carries another "full fee" for the new product.

    We have done hundreds of "feasibility analysis reports" and they typically result in saving the client $15,000 to $75,000 and some have saved the client from buying a home that would have slid off the hill. I remember one that there was so much subsidence that I was able to show the client where the home had actually moved nearly two feet towards the street. The fix was about $200,000. The agent called me later and said the sellers hadn't disclosed that fact but seemed to know it when they dropped the price by $175,000. 

    My question to you is "was the $350 fee we charged for this feasibility worth the fee paid?" Of course it was, so was the one where the sales price was dropped by $15,000. It clearly has it's place.

    When doesn't it have it's place?

    If you are trying to close fast, then don't waste your time with a feasibility report. When you provide your consultant with the "construction budget" figures order the "full consultation" and with that budget in mind we make the proper inspection at the get go, and allow enough time to do that. In the event we see the project is way over budget we automatically change gears and provide the lessor report at the lower fee and send the Realtor back to renegotiate the price.

    Lets address collecting our consulting fees up front which is standard practice

    The consultant is like a home inspector or appraiser in that regard, we all collect our fee up front. The unique thing about our fee is that it is typically reimbursed to the borrower at closing of  the loan. You can actually provide an "escrow instruction" to your title company or attorney and let them know you have paid $729 (in this example) to the consultant and you want that accounted for and added to the borrower's contribution to the escrow.

    The FHA guideline is very clear on the collection of our fees from the client to state that the lender IS NOT required to help us collect our fee. Therefore the LENDER doesn't have the right to tell us to take our fee at closing. They don't have any say in our fee collection process. They certainly shouldn't be making promises that haven't first been okayed by the consultant about those fees. 

    Conclusion

    If you want to close faster order the consultation. If you have lots of time by all means, order a feasibility but if you want to save money and want to move into high gear to get your loan closed faster then order the Consultation and forgo the feasibility report. As long as your consultant has your construction budget in hand, you should move much faster to a close. Payday for you and then the work can begin.

    There seems to be a disconnect between the lender's definitian of a "feasibility report" and what a feasibility report actually is. We have lender clients ordering "feasibility reports" pretty regularly and when quized on their order it turns out the were actually referring to a full consult. 

    Definitions are as follows: What we do for our fee 


    Full consultation
    The consultant will go over the rules of the 203k project parameters, discuss some offence, assist with ideas of how you might better utilize the space, get the most bang from your buck, and work with the client to provide a “scope of work” that includes the HUD/FHA minimum property standards (MPS) and what the client may want over that minimum while keeping in
    mind the amount the client’s budget. We then provide a comprehensive report that includes about 99% of the paperwork the lender needs to go to underwriting. This process was designed to take two weeks. Sometimes a bit less, sometimes a bit more time will be required.

    Feasibility Analysis
    This is a quick look at the property for the buyer or the seller of a property.

    Sellers Report 
    - If a seller wants the highest possible amount for their property and they understand it needs work this product is a must. We provide a limited report that identifies the items that are health and safety or of necessity under the HUD/FHA Minimum Property Standards (MPS). This is all the seller is interested. What repairs are needed to bring my property to the MPS to get it sold.
    - If the seller is a bank or lending institution we also provide an estimate of the cost for repairs that most potential buyers might do such as update the kitchen or bathroom(s) where they were adequate for MPS. This gives the potential buyer info they need to make a decision now.

    Buyer's Report

    - If a buyer is about to place an offer on a property that requires repairs they must have a clear idea of the cost to make the repairs. If the property is being sold for $250,000 and needs $150,000 in repair it must appraise at $400,000 or it doesn’t make any sense to buy it. If the value after improvements to MPS is only $350,000 then the home is only worth $200,000 “as is”. Knowing that number for the repairs is part of your due diligence prior to purchase of a fixer.

    - On the other hand, the buyer may also want to know the cost of the additional repairs they may want to add to the mix. In that case a Feasibility Analysis from The Mike Young Team will also provide a quick estimate of those repairs as well. So you actually get two estimates, one for MPS which is used to help you with your offer and, the second one with your additional improvements that make this YOUR HOME.

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality203k software for consultants to speed up the underwriting process..

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug


  4. I need more money for my renovation project than the FHA loan limits. Is there a higher balance loan available for my project?

    Yes indeed, there is. There is another product out there than is available up to three million ($3,000,000) loan amount. Is it 3.5% down, of course not but typically when someone is looking at houses in that realm they quite often pay cash so a 65% LTV is fine.

    Just because that is the limit doesn't mean you have to borrower that entire amount. You can borrow up to that amount and the down payment is variable, the more you borrower, the higher the LTV. Make sense?

    We had a job the other day that had a purchase price of $745,000 and just over $115,000 in renovation, this program would fit this scenario. How about another where the purchase price was $1.5MM and it needed $300,000 in renovation.. on the surface it would work however it turned out to have 14 structures on the site and part of the construction would be to remove all but three of the structures and keep the log cabin and renovate it... NOT going to happen with this loan product as it specifically states "no log cabins". They must have seen that one coming.

    If you have a possible project please call us and we'll send you to the right people to get it funded for you. Remember that your consultant should be the first one on the job to help you with the scope of work and to help you find that "contractor" fit for your project. 

    Mike Young, 203k Team Leader    Mike ready for your 203k order

    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.

    Got a 203k project giving you "fits" contact www.203k911.comIf you are looking for quality203k software for consultants to speed up the underwriting process..

    Skype name: the203kconsultant

    following Mike Young on Twitter Facebook You Tube 203konline.com MY 203k Team bug

  5. HUD/FHA felt there was too much confusion with the name Streamline k versus the FHA Streamlined Refi and it was a bit confusing to those who hadn't heard of the 203k. Why hadn't they heard of the 203k is beyond me. It has been around since 1961 and is going stronger than ever.

    Sreamline k loans now and hereafter referred to as "Limited 203k" loans always provided 50% of the materials cost up front to the contractor unless you were dealing with a lender like Wells Fargo that only allowed 35% or Prospect Mortgage at 40%. Most other lenders provided the full 50% per the guideline.

    The new rule as it is proposed for

    Standard 203(k) transactions, Mortgagees may disburse the following at closing:

    • permit fees (the permit must be obtained before work commences);
    • prepaid architectural or engineering fees;
    • prepaid Consultant fees; [reimbursed to the borrower]
    • materials costs for items, prepaid by the Borrower in cash or by the contractor, where a contract is established with the supplier and an order is placed with the manufacturer for delivery at a later date; and
    • up to 50 percent of materials costs for items, not yet paid for by the borrower or contractor, where a contract is established with the supplier and an order is placed with the manufacturer for delivery at a later date
    • For any Disbursements paid to the contractor, the Mortgagee must hold back 10 percent of the draw request in the Contingency Reserve.
    This is actually a pretty big thing. This will allow us to get reimbursed for materials... materials at 50% of their cost at the close of escrow. By paying that directly to the supplier with proper 1099 form and invoice copy for materials they can get the money at close of escrow. This should speed things up considerably for getting the big ticket items deposits paid for up front at the closing. 
    While the permits and some of the other fees has been the case for yers the 50% of some of the materials costs paid at close is going to help allow more contractors the flexibility to do more 203k projects.
    Mike Young, 203k Team Leader    Mike ready for your 203k order
    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.
    To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages.
    Got a 203k project giving you "fits" contact us at www.203k911.comIf you are looking for quality 203k software for consultants to speed up the underwriting process.
    Skype name: the203kconsultant
    t_logo-a.png Facebook You Tube 203konline.com MY 203k Team bug

  6. We are interested in your 203K course but our biggest concern is learning how to gain the business, who to market to and how to contact key people. Do you have help in this area?

    We can use more consultants all over the country. I'm happy to take you to the next level when you are ready. Follow the links below to learn how you can become a 203k consultant. Actually the more there are in an area the more business everyone seems to get. I can litterally go to any large city in the USA and create a 203k presense that would support me within 60-90 days. This product is all about letting people know you are in the business and what they can do with the program to better their lives. Always put the client first and you can't go wrong.

    Mike Young, 203k Team Leader    Mike ready for your 203k order
    We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state. To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages. Got a 203k project giving you "fits" contact us at www.203k911.comIf you are looking for quality 203k software for consultants to speed up the underwriting process.
    Skype name: the203kconsultant
    t_logo-a.png Facebook You Tube 203konline.com MY 203k Team bug

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