The situation

When we started working with the Board of a 60-unit association in Cheshire, CT, the focus was on replacing the failing asphalt and sidewalks and the remediation of the shared basements. The association had no reserves, and that work was simply too expensive to pay for out of pocket.

About four months into planning, the roofs started leaking. We quickly pivoted, developed roofing specifications, and added new roofs and full gutter replacement on all five buildings to the project list. Together with the sidewalk and plumbing work, the total came to roughly $2 million. Paying upfront would have meant a special assessment of about $33,000 per unit, due all at once.

The real cost of waiting

Putting the work off wasn’t free either. Construction costs keep climbing, and on a $2 million scope that means roughly $120,000 more for every year the association waits. That’s about $2,000 per unit, per year, for the exact same work.

The leaks cost even more. The ceilings contained asbestos, so every leak meant testing, abatement, and rebuilding, at about $8,000 each. With all five buildings leaking, the association was spending money on repairs that never fixed the real problem.

The five projects

With a long-term loan, every component’s useful life matters. You can’t have something wearing out and needing replacement while the association is still paying for it. That’s why we chose concrete sidewalks over asphalt and specified enhanced details for the new asphalt.

New roofs and gutters on all five buildings. Every roof was about 30 years old and leaking. Replacing them stops water at the source and protects everything underneath. Full gutter replacement improves how the buildings handle water, which matters more each year as rainfall amounts increase.

Concrete sidewalks. The old asphalt walkways were cracked and heaving. Concrete costs more up front but has a much longer useful life.

Asphalt and parking expansion. The paving was failing, with large potholes throughout, and the community needed more parking. New asphalt is only as good as the plan behind it. A proper evaluation and a detailed scope of work are what make it last.

Asbestos abatement and mold remediation. Leaking unit owner’s plumbing had caused mold in the shared basements. Instead of working around asbestos-containing materials, the association is removing them completely. Future leaks become ordinary repairs, not abatement projects.

Plumbing upgrades. The association owns five hot water tanks, and many of its gate and ball valves were failing or seized. Replacing the tanks and valves gives the association reliable control of its plumbing again.

How the financing works

Leader Bank provided a $2 million loan that is repaid through a special assessment spread out over 20 years. Instead of a $33,000 lump sum, owners make manageable payments. Owners who would rather pay off their share in full can do so at any time.

The result: all five projects get done now, at today’s prices, and owners choose how they pay.

Why the right manager matters

This association had a few issues that affected its risk rating with lenders, and not every bank would have said yes. Leader Bank was able to provide the financing anyway. Getting there took a manager who knows what banks look for and which lender fits a given association.

If your association is facing deferred projects and thin reserves, Insight Real Estate & Management can help you evaluate the work, build the right scope, and find the right financing. Contact us to start the conversation.