Hey everyone, I'm a young investor working on my first deal and looking for some guidance. I'm looking to buy a home that is selling for a significant discount to market in my neighborhood; property is going for $160k and comps are going for $215k. It's selling for a discount because it needs a good amount of interior renovations. My goal is to finance the home through an FHA 203(k) loan, work on the repairs I can do myself, hire a contractor to do the rest, and then rent out the rooms. My question is, what order should I take these steps in?
Do I make an offer, get a contractor to come in and inspect the cost of renovation, and then secure financing? Please let me know
First step when doing a 203k is find an experienced lender that knows how to do these loans backwards and forwards.
Interview them about how many they’ve done, and also if they can make any contractor recommendations.
Get pre-approved for your max amount.
Doing the work yourself under the scope of the work of the loan is extremely limited. You’d have to just do it on the side, and pay for it out of pocket, unless you’re an experienced contractor (they will check you out if you’re qualified to do the work)
From there, create a scope of work of what you want to do with the 203k consultant, and then start shopping for contractors. Once the loan closes you can start the work.
@Matthew Porcaro I appreciate your feedback, that’s very helpful. That gives me a good frame of reference to move forward.
Hey, how did it turn out for you?