When faced with the challenge of replacing roofs for a three-building community, we at Insight Real Estate Management devised a creative, fiscally responsible solution that safeguarded the community’s financial health while ensuring the timely completion of the project. Photos of this project are at the bottom of this page.
The Challenge:
All three buildings in the community required new roofs with in the next 3 years, but the reserves were low, and obtaining a loan was not a viable option due to high costs relative to the amount needed. We had to find a way to finance this project without placing undue financial stress on the community.
The Plan:
- Sourcing and Budgeting:
We began by sourcing bids from three reputable roofing contractors to ensure we obtained the best value for the project. Once a contractor was selected, their estimates were used to project the costs of the roof replacements for the other two buildings at their respective start dates. This approach provided a clear financial roadmap for the community to follow. - Funding the First Roof:
The first roof was funded through a combination of reserve funds and strategic budget reallocations. This allowed us to kickstart the project without introducing additional financial burdens to homeowners. - Developing a 4-Year Special Assessment
- Year 1: By the Summer, funds from the special assessment would be sufficient to replace the roof on the second building.
- Year 3: Accumulated funds would allow us to replace the roof on the third building.
- Maintaining Reserve Health
At the end of the four-year assessment, we anticipate the reserve fund will recover to approximately $80,000, positioning the community for future projects and unforeseen expenses.
The Results:
This phased approach, supported by detailed cost projections from the selected contractor, allowed us to complete all three roofing replacements without taking out costly loans or significantly depleting the reserve fund. By balancing immediate needs with long-term planning, we preserved the financial health of the community while delivering a high-quality outcome.
Key Takeaways for Other Communities
- Sourcing and Planning: Obtain multiple bids and use realistic projections to inform long-term financial strategies.
- Strategic Planning: Start by assessing available reserves and other funding sources to prioritize urgent needs.
- Budget Reallocation: Look for areas in the budget that can be temporarily adjusted to fund critical projects.
- Special Assessments: Implement assessments thoughtfully and with clear communication to homeowners to minimize resistance.
- Reserve Rebuilding: Ensure that your financial strategy includes a plan to replenish reserves to maintain fiscal health.
This project highlights our commitment to innovative problem-solving, financial responsibility, and community-focused management. At Insight Real Estate Management, we understand that every challenge is an opportunity to demonstrate why we’re trusted advisors for the communities we serve.
If your community faces similar challenges, contact us to learn how we can help safeguard your community’s future while addressing today’s needs.
