The bank called on Thursday to tell us that we got the loan!
The terms need to be reviewed and the papers need to signed off then they cut the check. I'm so excited! Perhaps another minor miracle will occur and we can get our demolition and building permits before the end of the year so construction can start.
Yowsa! Things are moving forward. Our hard work is paying off. Everyone keep your fingers crossed.
Showing posts with label The Loan. Show all posts
Showing posts with label The Loan. Show all posts
Saturday, September 10, 2005
Wednesday, September 07, 2005
Timeline
Assuming my condo association gets the loan; our back porch construction timeline should look a little something like this:
Mid September to October 1st, 2005
The loan is approved and the final bank paperwork gets signed off. We also sign the contract with our porch vendor and put down a 20% deposit.
October 1st, 2005
The porch vendor starts the multi-step demolition and construction permit process with DCAP (The Department of Construction and Permits for the City of Chicago). They would also come out and reinforce our current porches (for free might I add) so their condition does not further deteriorate while waiting for the permits to be granted.
February 14th, 2006
Assuming everything went smoothly---all of the drawings, blueprints and plans have been accepted from the porch vendor. The permits to demolish our old porches and construct new ones may be granted.
March 17th, 2006
Once again---assuming all goes well; construction on the porches may start and hopefully be completed before Easter.
What’s with the gaps of time? Why does it take so long? Well friends, let me give you a basic primer (as I understand it) for dealing with the bureaucracy that surrounds getting anything built in the City of Chicago.
Mid September to October 1st, 2005
The loan is approved and the final bank paperwork gets signed off. We also sign the contract with our porch vendor and put down a 20% deposit.
October 1st, 2005
The porch vendor starts the multi-step demolition and construction permit process with DCAP (The Department of Construction and Permits for the City of Chicago). They would also come out and reinforce our current porches (for free might I add) so their condition does not further deteriorate while waiting for the permits to be granted.
February 14th, 2006
Assuming everything went smoothly---all of the drawings, blueprints and plans have been accepted from the porch vendor. The permits to demolish our old porches and construct new ones may be granted.
March 17th, 2006
Once again---assuming all goes well; construction on the porches may start and hopefully be completed before Easter.
What’s with the gaps of time? Why does it take so long? Well friends, let me give you a basic primer (as I understand it) for dealing with the bureaucracy that surrounds getting anything built in the City of Chicago.
Tuesday, September 06, 2005
The Loan
Well here’s where it gets interesting folks. We need money to get the porch project started but it would seem that we may not be the best credit risk at this point.
Let’s go over what we know so far:
We can’t find our bank account or records prior to June 2003
Association accounting was sketchy at best and hadn’t been properly formatted on a spreadsheet
Several unit owners were severely delinquent on their assessments.
As an association we were hemorrhaging money from a bloated budget
Financially attractive, no?
Now let’s all talk about that dirty word that isn’t supposed to exist either in lending or the real estate market in general---redlining. Redlining can be defined in several different ways:
Unfair discrimination based not on the risk’s characteristics but on its location. The term is commonly associated with an insurer’s refusal to consider insuring any home or business within a specific area marked by a line drawn on a map.
Or
A lending practice, now illegal, where banks drew red lines around communities of color and low-income communities and refused to make loans in those neighborhoods.
I strongly suspected that we weren't an attractive loan risk as I work for a bank and I’ve gone through the mortgage and refinancing process several times. The way our record keeping and cash flow was, our application wouldn’t make it through underwriting at any of the big downtown LaSalle Street banks. Even if we did look good on paper and had a sizeable reserve fund, we’d still have a problem getting a loan from any on the downtown banks.
Naturally I’m not accusing anyone of anything but I have a feeling on how this process would for a troubled association in Chicago’s 5th poorest neighborhood. The best analogy I can think of is this: If you see a pothole in the road, are you gonna drive through it and possibly bust your axle or drive around it and continue your trip?
Obviously we want to drive around it and continue our trip.
Knowing the set of obstacles that we would face with a mainstream financial institution---even with good financials---it was up to us to find someone who understood the special needs of a small association with a cash flow problem, infrastructure issues that also happen to reside in an emerging neighborhood. But nonetheless saw the great potential in both the condo association and the Woodlawn neighborhood.
Not too tough of a job, huh?
After researching our potential options and speaking with some institutions, I discovered our friends at a smaller bank named Shore Bank.
Shore Bank, which was formerly known as South Shore Bank, is a bank based on the south side of Chicago who believes in the power of the neighborhoods where they’re located. When many of the LaSalle Street banks weren’t even attempting to originate mortgages or commercial loans on the south and west sides of Chicago, Shore Bank was (and is) filling that void.
So I go ahead and make a few phone calls on the association’s behalf, find a contact name and request the paperwork to get the ball rolling. I received the paperwork, forwarded it on to our treasurer who with our president completed it and the preliminary loan officer interviews.
I believe we stressed that as an association we significantly tightened up our financial ship and started adhering to standard business practices. In short we’re treating our condo association less like a club and more like a business.
Our loan officer has given us every indication that we’re on track to get the loan but as far as I'm concerned, the loan isn’t done until the check is in our account and has cleared. After all, we turned in our application in either late June or early July and have yet to get a solid answer (fingers crossed).
I’m optimistic that this will work out but I still want the money in the bank so we can get to those porches.
The year is winding down and more than likely we won’t be able to have our new porches built until next year the way the DCAP (Chicago Department of Construction and Permits) timeline is looking.
Let’s go over what we know so far:
We can’t find our bank account or records prior to June 2003
Association accounting was sketchy at best and hadn’t been properly formatted on a spreadsheet
Several unit owners were severely delinquent on their assessments.
As an association we were hemorrhaging money from a bloated budget
Financially attractive, no?
Now let’s all talk about that dirty word that isn’t supposed to exist either in lending or the real estate market in general---redlining. Redlining can be defined in several different ways:
Unfair discrimination based not on the risk’s characteristics but on its location. The term is commonly associated with an insurer’s refusal to consider insuring any home or business within a specific area marked by a line drawn on a map.
Or
A lending practice, now illegal, where banks drew red lines around communities of color and low-income communities and refused to make loans in those neighborhoods.
I strongly suspected that we weren't an attractive loan risk as I work for a bank and I’ve gone through the mortgage and refinancing process several times. The way our record keeping and cash flow was, our application wouldn’t make it through underwriting at any of the big downtown LaSalle Street banks. Even if we did look good on paper and had a sizeable reserve fund, we’d still have a problem getting a loan from any on the downtown banks.
Naturally I’m not accusing anyone of anything but I have a feeling on how this process would for a troubled association in Chicago’s 5th poorest neighborhood. The best analogy I can think of is this: If you see a pothole in the road, are you gonna drive through it and possibly bust your axle or drive around it and continue your trip?
Obviously we want to drive around it and continue our trip.
Knowing the set of obstacles that we would face with a mainstream financial institution---even with good financials---it was up to us to find someone who understood the special needs of a small association with a cash flow problem, infrastructure issues that also happen to reside in an emerging neighborhood. But nonetheless saw the great potential in both the condo association and the Woodlawn neighborhood.
Not too tough of a job, huh?
After researching our potential options and speaking with some institutions, I discovered our friends at a smaller bank named Shore Bank.
Shore Bank, which was formerly known as South Shore Bank, is a bank based on the south side of Chicago who believes in the power of the neighborhoods where they’re located. When many of the LaSalle Street banks weren’t even attempting to originate mortgages or commercial loans on the south and west sides of Chicago, Shore Bank was (and is) filling that void.
So I go ahead and make a few phone calls on the association’s behalf, find a contact name and request the paperwork to get the ball rolling. I received the paperwork, forwarded it on to our treasurer who with our president completed it and the preliminary loan officer interviews.
I believe we stressed that as an association we significantly tightened up our financial ship and started adhering to standard business practices. In short we’re treating our condo association less like a club and more like a business.
Our loan officer has given us every indication that we’re on track to get the loan but as far as I'm concerned, the loan isn’t done until the check is in our account and has cleared. After all, we turned in our application in either late June or early July and have yet to get a solid answer (fingers crossed).
I’m optimistic that this will work out but I still want the money in the bank so we can get to those porches.
The year is winding down and more than likely we won’t be able to have our new porches built until next year the way the DCAP (Chicago Department of Construction and Permits) timeline is looking.
London Bridge
When I think of the children’s song “London Bridge is Falling Down” I tend to think of our back porches.
To put it mildly, our porches are a Lincoln Park tragedy waiting to happen. To those of your not in the know about Chicago land news, roughly two years ago groups of people in an apartment building were having a party in one of the more popular north side neighborhoods named Lincoln Park. As with most parties with recent college grads and twenty somethings that comprise a good part of the population in Lincoln Park, guests spilled out on to the back porches. The porches fell under the strain of the numerous people and pan caked one on top of the other causing thirteen deaths and multiple casualties.
In short, it was a nightmare---one I don’t want repeated in our little neck of the woods. The last thing we need is friggin lawsuits flying around and deaths and/or injuries to contend with.
As a result we have spent a majority of this calendar year getting estimates, doing due diligence on contractors and trying to figure out how in God’s name were going to pay for it all.
At first we were simply going to repair our porches but as the estimates started rolling in and individual after individual told us the dire state of our porches, our project turned from a repair to a replace. Either way, we weren’t (and aren’t) even remotely prepared to deal with the City of Chicago Department of Buildings and their brutal permit process.
Ladies and Gentlemen the bureaucracy surrounding getting anything built or getting a permit to get anything built in the city of Chicago is simply frightening. I’d rather be thrown in the stocks without food and water for a few days. I’d rather take Calculus again than even attempt to negotiate that nightmare of a process downtown. The thought of going to DCAP (Department of Construction and Permits) honestly breaks me out in a rash.
Some of the yahoos that we got estimates from expected us, a bunch of novices, to navigate the getting blueprints, a structural engineer, an architect and chat with a project manager from DCAP all on our own.
Yeah right…
While we were murky on who was going to do the work at that point, we did come up with a budget for the porches and some other work that we wanted to get done and start the process of levying a special assessment.
Now I know that the process sounds a little ass backwards but we had to start collecting money for whatever portion of the project had to be done. We couldn’t wait too much longer to get the financial portion together lest we spin our wheels and the project never gets off the ground.
Nonetheless, we as an association also had a “Plan B” in our back pocket.
As I’ve mentioned, our porches are in horrible at best. They really are in the process of falling down and should have been either repaired or replaced when the building was rehabbed. The catch 22 is that seeing that people couldn’t come up with their portion of he special assessment out of thin air, we had to offer several types of payment plans with full up front payment being the optimal option.
Obviously that was not going to be an option with most of our unit owners. Myself included.
We need the money right away to fix our porches but there was no way several tens of thousands of dollars was going to materialize out of nowhere. What’s a cash strapped association to do?
Get a bank loan of course.
To put it mildly, our porches are a Lincoln Park tragedy waiting to happen. To those of your not in the know about Chicago land news, roughly two years ago groups of people in an apartment building were having a party in one of the more popular north side neighborhoods named Lincoln Park. As with most parties with recent college grads and twenty somethings that comprise a good part of the population in Lincoln Park, guests spilled out on to the back porches. The porches fell under the strain of the numerous people and pan caked one on top of the other causing thirteen deaths and multiple casualties.
In short, it was a nightmare---one I don’t want repeated in our little neck of the woods. The last thing we need is friggin lawsuits flying around and deaths and/or injuries to contend with.
As a result we have spent a majority of this calendar year getting estimates, doing due diligence on contractors and trying to figure out how in God’s name were going to pay for it all.
At first we were simply going to repair our porches but as the estimates started rolling in and individual after individual told us the dire state of our porches, our project turned from a repair to a replace. Either way, we weren’t (and aren’t) even remotely prepared to deal with the City of Chicago Department of Buildings and their brutal permit process.
Ladies and Gentlemen the bureaucracy surrounding getting anything built or getting a permit to get anything built in the city of Chicago is simply frightening. I’d rather be thrown in the stocks without food and water for a few days. I’d rather take Calculus again than even attempt to negotiate that nightmare of a process downtown. The thought of going to DCAP (Department of Construction and Permits) honestly breaks me out in a rash.
Some of the yahoos that we got estimates from expected us, a bunch of novices, to navigate the getting blueprints, a structural engineer, an architect and chat with a project manager from DCAP all on our own.
Yeah right…
While we were murky on who was going to do the work at that point, we did come up with a budget for the porches and some other work that we wanted to get done and start the process of levying a special assessment.
Now I know that the process sounds a little ass backwards but we had to start collecting money for whatever portion of the project had to be done. We couldn’t wait too much longer to get the financial portion together lest we spin our wheels and the project never gets off the ground.
Nonetheless, we as an association also had a “Plan B” in our back pocket.
As I’ve mentioned, our porches are in horrible at best. They really are in the process of falling down and should have been either repaired or replaced when the building was rehabbed. The catch 22 is that seeing that people couldn’t come up with their portion of he special assessment out of thin air, we had to offer several types of payment plans with full up front payment being the optimal option.
Obviously that was not going to be an option with most of our unit owners. Myself included.
We need the money right away to fix our porches but there was no way several tens of thousands of dollars was going to materialize out of nowhere. What’s a cash strapped association to do?
Get a bank loan of course.
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