I was looking for advice/ seeing if anyone in the Central MA area had any experience with 203k loans.
My mother currently owns a 3 decker in Worcester and is looking to sell it to me in May of 2016.
This was my home growing up, my family lived on the first floor while my parents rented the top two floors out. My father passed away 7 years ago and my mother decided she no longer wanted to deal with tenants, so she rented the floors out to my two older sisters and their families for cheap (she had no problem paying her mortgage, but she charged my sisters practically nothing for apartments worth easily $1100 each).
She eventually stopped putting the necessary work into maintaining the home and although a lot of it is in great shape, there are still a few renovations that need to be done, some of which could get costly.
The home needs a new roof, updated plumbing and an exterior paint job. Besides that it is in pretty decent shape to my knowledge. I have not had it inspected yet but these are the updates I already know need to be done.
Each apartment has 3 bed rooms, beautiful hardwood floors throughout and a lot of character. I am certain I can get $1000-$1100 for each floor (I plan to live in the first floor apartment with my Fiancé' and kids). I would like to update the appliances as well.
Now back to reason I started this thread!
This will be my first property ever, let alone my first investment property and I would really like to go into it with as little money as possible.
I started looking into 203k loans because of the work that needs to be done, I thought having the repair costs included would help me out considerably.
Does anyone have experience with 203k loans in my area? Or in general?
Does the loan cover updating appliances?
Could this be a good idea for my situation?
I appreciate any and all info!
- I am also very interested in meeting up with experienced investors in my area, so if anyone would like to get together for coffee one day so I could pick your brain, that'd be great!
@Robert Cook Everything you are saying about the property work (roof, paint, etc.) should be covered by the FHA 203(k) loan. FHA 203(k) might allow you to cover appliances but I don't think they will allow much money for that. So you should proceed as though appliances will not be covered
Welcome to the site.
If the house was built before 1978, more then likely there's lead paint that will have to be addressed before renting out the units. Don't forget to factor that in to your calculations. Generally between $2000 and $5000 per unit.
It's not a 3 decker. It's a triple deckah.
@Derreck Wells thank you! I forgot the mention my mother actually took care of the lead paint recently!
@Russell Brazil yes sir! A triple deckah in Woostah! Haha
I know there are credits given for lead removal in MA, **not sure of exact amount** but I think It's like $1500 per apartment.
Great to know! Thank you very much for the information. @Danny N.
How did you make out with this? Did you end up using the 203 loan ?