I am looking to purchase a live in flip within the next 6 months. I plan to use a 203K loan. Any tips or things I should know before I get started?
@Daniel Adams One thing to keep in mind with the 203k loan is the way that the money is handled for the renovations and that it is paid directly to the contractors, and all the associated restrictions. Due to this, the 203k loan may not be that great of a product for a live in flip. Most people when they say they want to do a live in flip envision themselves fixing up the property slowly over the course of time. In order for you to do your own work on a 203k, you have to show I believe "professional expertise" in renovations....essentially you need to be a licensed tradesman.
Also the renovations have to be finished within 6 months, which most live in flip people are exceeding that time frame since they are usually doing the work themselves.
youll have to live there for at least a year before refinancing out of the FHA loan. i just moved into my 203k property last weekend with intentions of renting it out a year or two from now.
Thank you for the advice. I am planning to hire a contractor for major areas of repair using the 203K loan. (Kitcken, bathroom, roof, other major work) I would not include things such as painting, floors, smaller bathrooms etc. I would assume that the major work could be completed in those 6 months and leave me to do other upgrades once livable. Does that seem feasible?
Thank you for your response. I do plan to live in the flip for the required period of time. Where did you purchase your flip?
I hope to build my portfolio with this property as well
@Daniel Adams What upgrades can be pushed off is really up to the 203k inspector who comes out to the property to price out the renovations. @Upen Patel is a mortgage broker...and I bet he has a lot of information on the 203k loan.
Also try tagging people in the responses so they see it. Instead of just typing the persons name type @ and then their name...and at the bottom of the reply box a list of names will pop up for you to choose. This will help with your conversations. Without someone being tagged, they may never see your responses, and your questions might go unanswered.
@Daniel Adams i bought near patterson park in baltimore city.
@Kyle Gregg sounds great, good luck with it!
Do you have any experience or know the area of Carvel Beach?
I am looking at a few places over there.
I was told that if you use the 203k you need to use their contractors. Not that you could use your licensed guy I think they just prefer using theirs. I think it's ok to not live there depending on severity of rehab as long as it's your primary residence. Good luck keep us updated.
@Russell Brazil Thanks for the mention.
FHA 203k are great but need a lot of coordination while the loan is being done and once it is funded (to get the work done). Also depending on the type of loan Standard vs Steamline, will have an impact on the # of different folks involved and who you can use to get the work done. And NO, you can't do the work yourself if you want it to be paid from the loan.
Upen Patel, Mortgage Banker
Federal NMLS# 1374243
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