The race was on. Midwest Real Estate Services rehabbed a massive six-project, 767-unit portfolio of low-income rental units in Ohio with lightning speed—at the rate of eight units a week. Do the math. flat equals a whopping 40 units a week.
“It was all about speed,” says Bill Heifner, president of Renier Construction, the Columbus, Ohio-based contractor that led the charge. “Get in, get the punch list completed, and get back out.”
Midwest purchased the portfolio from The Wallick Cos. in March 2006 after a two-year acquisition and financing process. The '70s-era buildings, scattered throughout six cities in Ohio, were built under the HUD 236 program and later received project-based Section 8 funding. Midwest participated in HUD's decoupling program, which allows Section 236 interest reduction payments to be decoupled from the prepaid HUD mortgage and applied to the new mortgage. The owner received new Housing Assistance Payment contracts from HUD and agreed to keep the properties affordable for the next 20 years. Midwest received state bond inducements and low-income housing tax credits.
“We were running on three different freeways trying to get this deal closed—dealing with HUD, the state of Ohio, and the Ohio Financing Agency,” says Thomas Lusk, principal of Columbus, Ohio-based Midwest. “This transaction was very complicated; not everyone can put all the pieces together.”
Yet, for Midwest, the complications had just begun. With financing in hand, the firm started its next task—renovating the 767 units while temporarily relocating the residents (95 percent of the units were occupied). The properties, the largest being the 272-unit Wildwood Village Apartments in Columbus, needed updated kitchens and baths. So Midwest embarked on an ambitious plan to renovate five units across the six locations per week, spending $14,000 per unit for new kitchens and baths, plus new roofs, windows, and HVAC systems where needed. AGAINST THE CLOCK For the plan to succeed, Midwest needed to find a general contractor that could handle such a tall work order. Enter Renier, a commercial contractor with project management know-how. Renier developed a tight construction plan: The renovation team arrived on a family's doorstep at 8 a.m. Monday morning, moved the family to a hotel by 9 a.m., and completely renovated the unit in time for the family to return by 4 p.m. Friday. “The plan had to be choreographed and rehearsed, and when you pulled the trigger, you had to go in a hurry,” Heifner says.
The crew closely followed the meticulous work schedule. On Monday, they gutted the bathrooms, kitchens, and utility rooms. On Tuesday, they completed structural corrections and installed new tubs and HVAC systems. All cabinets and kitchen sinks were installed on Wednesday, and on Thursday, the flooring and painting were completed. That left Friday free to install appliances and clean up.