The Small Building Initiative could hire a part- or full-time construction manager to provide in-housing consulting services to homeowners. This staff member should either already be a certified 203(k) consultant, or would do so upon hiring, which would allow him earn compensation for the Small Building Initiative in the form of the 203(k) consulting fee.
As an alternative, The Small Building Initiative could retain a series of existing 203(k) consultants to perform services for homeowners under the program on behalf of the Initiative, with payments passing through to the Initiative. This could introduce more competition for the work, reduce the overhead of the Initiative and also spread the work among a series of consultants (not one salaried employee) in a manner that is more conducive to how they already operate, taking the amount of business they can handle at any time. This may also take the form of a revenue-sharing agreement whereby 203(k) consultants provide a portion of their fee to the Small Building Initiative for brokering the relationship.
Another critical form of technical assistance would help prospective homebuyers, who are not construction experts, but who are open to acquisition and renovation of two- to four-unit buildings. Low-cost finished homes in the market are in large supply, so acquisition and rehabilitation must provide value that cannot be found elsewhere with as little burden as possible. Hopefully, these homes are less costly than finished homes and provide a homebuyer the added value of being able to design a home to suit oneÕs particular needs. This process, however, hinges on competent and trustworthy general contracting. There are three approaches considered that could provide this form of technical assistance to potential homeowners in Woodlawn.
The Small Building Initiative could take on the role of passive intermediary (and perhaps incubator), taking no direct business interest in the 203(k) consulting process. The Initiative could host workshops for successful contractors to become 203(k) consultants and establish a list of Òpreferred consultantsÓ based on quality control that it would use for directing homebuyers. This strategy does not involve a source of revenues for the Initiative, but it also involves very little financial expense and risk beyond administrative overhead.
Based on the expressed preferences for supporting local developers and the need for flexibility, it is advised that a construction manager be hired than can serve as a 203(k) consultant to assist several homes through the construction process during start-up phase. This manager will also perform general administrative functions and transition the Initiative to serving as a more indirect intermediary ÒsponsorÓ of local 203(k) consultants.