I've been approved for up to $279,000 but I'm having trouble finding a viable property for my budget. I know the area pretty well and where I need to buy in to have consistent tenants and I'm just not quite at the budget needed.
- I found a property for a $180,000 that was in the desired area but needed serious renovations and I am not experienced in that. How can I build significant renovations into a loan ... or will I most likely just need straight up cash and not be doable?
- Some of the homes that would be perfect to rent out are about $20,000 over my budget of what I qualified for. What are my options to reach that point?
- In relation to Question 1, It's looking like my best option is going to have to find a property that needs some renovations, but not a ton, and buy it significantly below budget and then renovate? Does that sound about right?
Thanks for your help in advance.
homes are 20k over your budget?
wheel and deal offers to suit. u just might get an 180k offer accepted on a 200k! but yea include needed improvements in your budget. dont go over it in the end by buying a money pit.
ps dont be afraid to write the seller a heartwarming note (ie, into the offer) as to why u really want their house but XXXk is as high as ur approved for. some folks still actually care about who their home is sold onto, not just how much even in this market! =D
research 203k loans. Would be a great option if you buy right.
Look into 203k loans to have renovation cost rolled into a loan.
Also look into making offers on the 300k properties. At that price point 20k is only a 7 or 8% reduction. Its very possible you will be able to buy at 92% of list.
Look into FHA 203k loans.
There is tons of literature on this site about them but basically with a few added hoops to jump thru, you could get the purchase + reno cost rolled into 1 loan with you only coming out 3.5% + whatever % of closing cost you can negotiate.
A summary of how I understand the process is that you will have an FHA approved appraiser come out and appraise current market and future based on repairs. You will have 3( i believe) contractors come out to bid the work(class A licensed, insured, the works) and once contractor is selected, they will add the renovations and purchased price up to be your total loan amount which will need to be under or at your approved about. (280k)
There are two different types of 203k loans with different repair cost limits and extra steps to take which are basically based on if their are any structural repairs needed or just cosmetic. (obviously cosmetic is easier then structural). They will then hold money for repairs and disperse needed amounts as work is completed.
Hope this helps
I understand your pain Richmond properties are getting expensive but if you are willing to purchase outside of Richmond, and try places like Chester, Midlothian and chesterfield you will be able to find some greats deals...
I just bought a 4BR house a week ago as primary home with no repairs and plan to rent two of the rooms out for $475 each. This is a 2800sqft house with a finish basement and I only paid $257,000 using VA loan
The point is you can find a great house, just extend your search outside a little and you will find a good deal. Good Luck
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