Cincinnati, OH · Member since 2013 · 292 posts · 81 votes
As I'm crunching numbers, a thought came to me:
What are the possibilities of taking a wholesale, doing some initial work, then marketing it specifically in terms of a 203K loan?
Cons: I know that most people want to be able to walk into their dream house, and can't envision what things might look like otherwise. It looks like the holding time can be prolonged by the long time it takes a 203K to be approved. The pool of potential buyers is smaller.
Pros: A small mortgage (for this area and type of house) and being in an area where people can get ADDI and Welcome Home grants for downpayment assistance as well. Investing a smaller amount of my money strategically to get a decent return.
I haven't seen this happening, so I figure there must be some significant problems.
Hey Ben Skove I think you nailed it. 203K loans are REALLY annoying to work with, so it's not worth the trouble for anyone. That said, getting a cheap home, fixing it slightly, and then marketing it to Flippers is a strategy I've heard works well in a lot of markets!
I made one happen in 42 days and I think I'm pretty on top of it, if its a non streamlined it can take months.
When I see a 203k working is when the seller is more focused on the price than the amount of time it takes to close. If they are in no rush it can be mutually beneficial.
Tim G. The price point was something that I heard from a lender at a seminar; he also pointed out that using a 203K can push the loan amount up to where a conventional lender will consider it.