203k loan to start out flipping?

Question

Was thinking of the 203k loan recently, and was curious if that would be a good way to start out.  Starting small of course with a small flip with minimal work.  Good idea/bad idea? Anyone do this before and fail?

Peter Roehrich · Answer

@Joe Rosenberry I'm guessing that it is issued to individuals rather than LLCs. A call to a lender ought to answer that.

Wayne Brooks · Answer

You’ll have to sign a personal guarantee for Any loan you get....and llc’s can’t use fha or conventional loans.

Joe Rosenberry · Answer

@Peter Roehrich. So say my company wyz llc wants to buy and flip, i would be able to do it? Or i personally have to pull the mortgage?  I just read up on it real quick and it didn't say anything about that.

Peter Roehrich · Answer

@Joe Rosenberry that's the name of the product (Google it). It's a rehab loan like 203k but allows investors to use it.

Joe Rosenberry · Answer

@Peter Roehrich. A home style mortgage? Never heard of it.  How does that work?

Joe Rosenberry · Answer

@Wayne Brooks

Thanks, i didn't realize you had to occupy for a year.  That changes things

Peter Roehrich · Answer

@Joe Rosenberry as mentioned 203k requires owner occupancy for 1 year - think about a Home Style Mortgage, it is investor friendly.

Wayne Brooks · Answer

Well, for fha loans, since they are Owner Occupied only, you’d have to live in the property for at least one year after you rehabbed it.