Before and After: Co-founder & CEO Justin Goldman’s RenoFi-powered renovation in the Philadelphia Suburbs

Original Home

• Location: Devon, PA
• Built in 1963
• 2,050 sq. ft.
• 4 beds, 2.5 baths

Original value:

$545,000

The Renovation

• Additional 445 sq. ft.
• Added an addition that became a new kitchen & an adjoining great room
• Transformed old kitchen into mudroom/laundry room, redid bathrooms
• Turned old dining room into office, added a porch

After renovation value:

$830,000

In a world before RenoFi Loans ever existed, Megan and Justin Goldman stumbled upon a widespread issue: renovation financing.

They purchased a home in a suburb outside of Philadelphia in 2013, with plans for some minor renovations “at some point.” But after living in the home for five years and expanding from one kid to three kids, it was no longer just small cosmetic upgrades that they were thinking about.

Their home layout no longer worked for their family. It was becoming a bigger pain point in their everyday lives as the family grew.

The Project

They needed more sq. footage and a first floor plan that felt more open; one where Justin and Megan could be in the kitchen cooking, while still keeping an eye on the kids or staying connected to the friends and family they love to entertain. This meant bumping out the rear first floor wall to make room for a new kitchen and adjoining great room and converting their old kitchen into a new mudroom plus laundry room (it was previously in the basement which they didn’t love).

Justin also needed a home office so he could work remotely, which their home didn’t have any extra space for so their old dining room became a natural fit to transform into a home office. And it was time for separate bathrooms and a new basement for the kids, too.

“We wanted the basement redone because our oldest was seven,” said Megan. “He was at a point where he had friends over, and he didn’t need or want a parent on top of him. He wanted some separation and independence, and a place that all the kids could call their own.”

The home was originally built in 1963, so on top of Justin and Megan’s need to optimize and add space, the structure was due for some updates.

But Megan and Justin didn’t want to find a totally new home - they loved their school district, their neighbors and their quiet street. The location was pretty perfect, and an aspect they wanted to highlight in their renovation, as well.

“We live on a cul-de-sac so we are always outside,” said Megan. “The kids are always out with the neighbors in the circle, so another thing we wanted to add was a front porch, so we wanted to prioritize that over a deck or back patio.”

Initially, they weren’t sure what made more sense: split the renovation into multiple stages, or get it all done at once.

Megan and Justin researched good local contractors, potential interior designers, got a few cost estimates to compare, and thought about what exact changes they wanted to make.

They came to an important realization:

“It wasn’t just a bathroom, it wasn’t just a kitchen,” said Megan. “We realized there were major things we’d have to do…After meeting with different contractors, it made sense to get it all done at once.”

Lots of smaller renovation projects would disrupt their kids lives as well, which further motivated them to complete their project in one go.

The Problem

But the sticker shock of bids from contractors prompted them to look into financing. The renovation estimates they got were in the hundreds of thousands of dollars, a lot more than they previously pictured, and a lot more than they had saved for the renovation.

This left them at a frustrating stand-still in the renovation process.

They weren’t the only ones; many of their neighbors had a similar story. While the neighborhood was perfect for raising a family, the homes were older and required massively expensive updates just to make them livable.

“We weren’t flying in marble from Italy,” said Megan. “We just wanted to invest in high-quality work and high-quality materials that we’d love 20 years from now. It wasn’t just our pain, but our friends’ pain, too.”

Financing

Megan and Justin attempted to find a loan, to avoid having to tackle the project in phases. But long hours of researching ways to finance their renovation project yielded no results.

They came up empty-handed. None of the current loan options seemed to perfectly match their situation.

To start, they didn’t have enough home equity built up for a traditional home equity loan. Despite being in the home for five years already, the equity they had didn’t even come close to a third of their renovation cost.

A construction loan stood out as the best choice at first, because it factored in the after renovation value of their home, allowing them to borrow much more than a traditional home equity loan would.

But they had a great low rate locked in on their first mortgage and didn’t want to refinance which is a requirement of construction loans. Additionally, they were strongly advised not to use one, because of the complicated inspection and draw process that it would require, putting a huge strain on them and their contractor. They even found that some contractors flat out refuse to work with construction loans.

Justin and Megan were stunned when they realized the severe lack of financing options for home renovations. There wasn’t a single loan product available that offered low rates and low monthly payments with enough borrowing power to finance their entire project without having to refinance.

“There just wasn’t a good solution out there. All of the contractors we spoke to had said construction loans were horrendous,” said Megan.

The Solution

Lucky for The Goldmans, Justin just happened to be exiting his career in the food-delivery world. And when an entrepreneur sees a problem to be solved, he’s gonna go big or go home.

So Justin set out on a mission to fix renovation financing for the better — and that’s how RenoFi Loans were born.

Justin’s unique idea to combine the “after renovation value” used in construction loans with the well-known structure of a traditional home equity loan turned out to be a life-changing solution for homeowners.

Using the after renovation value offered a lot more borrowing power, and using the structure of a home equity loan offered long terms, low interest rates and a simpler product.

“RenoFi Loans were a win-win for the homeowners and the general contractors,” said Megan.

As Justin and Megan’s renovation finally began, so did RenoFi Loans! The Goldmans were one of the first RenoFi customers.

They partnered with Ardent Credit Union, a local PA lender who was the first lender to offer RenoFi Loans in the country.

The Results

“We could not have picked a better partner to launch RenoFi with,” said Justin. “Ardent truly embodies the credit union motto of ‘people helping people.’ It was a smooth process from start to finish.”

“They came in and did the appraisal and matched it with a plan,” said Megan. “Other than just having to straighten up the house and get the appraisal done, it was easy!”

Now that their home renovation is finished, Justin and Megan agree it was worth the investment. Megan and her kids love the new layout, especially after the kids’ school switched to online learning during the pandemic in Spring 2020.

“They can’t believe it’s our old house,” said Megan. “They love having their friends over. They love the new basement and the upstairs area.”

Advice

Megan has some advice for homeowners looking to do renovations. (Besides using a RenoFi Loan, of course!)

Find a great contractor with a great plan to ensure a successful finished product.

“It takes longer than anyone anticipates,” she said. “And you get what you pay for.”

Megan and Justin interviewed four contractors and got four bids. Instead of choosing the cheapest bid, they chose the one with the most detail, and they’re glad they did. Their bid was 12 pages long!

(Justin and Megan worked with Bryan Buono and Naomi Stein, both local to the Philadelphia area.)

“Bryan took the time to have literally every single one of his subcontractors come in and look at the house,” said Megan. “Our interior designer, Naomi, walked around the house and interviewed every single one of them.”

“Naomi knew the questions to ask, the materials to use, and then gave us an Excel spreadsheet with everything that she and the contractor were providing. It went off without a hitch.”

Megan says she wouldn’t change a thing about her beautiful new home. “I’m obsessed.”

As for Justin, he’s continuing to help homeowners like him tackle their entire renovation wishlist, as Co-founder and CEO of RenoFi. RenoFi’s mission is to make renovations possible, like it did for him and his own family.

Photo credit: www.raquellangworthy.com

Back

After