I have purchased my first property. Here is my deal: I purchased a HUD property with a known plumbing issue. The HUD docs say that is a problem that is less than 10k to fix. I dont have the cash on hand to fix it. So I am torn between going the 203 route or using credit cards and refinancing once I have done the necessary renovations. I bought it for $62k and the comps in the area are $105k. I am new to all of this and could use some advice. Help please!!!
Hi @Darla Love -
When you say "going the 203 route", I assume you're referring to a 203(k) rehab loan? If so, this is an FHA loan and not intended for investment properties. Unless you claim you're going to live in the house yourself, I don't believe this will be an option for you.
I'm guessing the house is going to need more work than just fixing the existing plumbing issue, correct? It seems unlikely that a single $10k problem would cause a house to sell for $40k below comps.
If I were you, I'd start by getting some contractor bids for all of the work that you don't plan to do yourself. This will give you a better idea if financing via credit cards is even an option for you. After that, I'd start looking at all my options to see which makes the most sense - this could be getting a personal loan, hard money loan, maybe there's equity in the house that you can access via a heloc?
Best of luck!