I'm looking to buy a condominium in the Springfield Section of Newark New Jersey. I saw two, one is priced kinda high (I've looked at comps and have not been able to find any condos that have gone for that price in the area...they have all been much cheaper). The other is much lower but is a fixer upper that would probably require work that would bring the total cost to be $140,000 with the addition of the money to do repairs.
I am so tempted to buy the fixer upper and rehab it but I've heard and seen some horror stories of people who have done renovation loans where their property has been sitting around for months with the work undone. Either that or the workmanship is very poor.
If there is anyone familiar with the 203k loan, can you give me some insight about the process and if it is worth the stress involved? Are there any success stories? Can work actually be completed in 2 months with the right contractor?
Also, the condominium only accepts conventional loans but I'm only familiar with 203k which I believe is FHA...is there a conventional rehab loan alternative?
Should I just suck it up and go after the more expensive condo unit or take a chance with the rehab condo??? (Both units will still need to be updated by the way)
@Mike McKeown It is not FHA approved so that's why Im trying to find an alternative, any suggestions?
most condos are not so no surprise. Fannie Mae HomeStyle would be the only alternative.
I did a 203K on the first foreclosure I purchased in 2014, which I then lived in for about two years. I used my own GC that I knew from working on my previous home. The lender sends an inspector to decide what work needs to be done, the GC does the work, the inspector comes back to make sure the work was done properly, then releases payment to the GC. I think we had about three inspections altogether as the work was being completed. Only thing is, some contractors do not want to wait to get paid, they want down payment upfront plus may not want to wait for inspector to release draw to them during the job. The GC has to understand the process and be OK with it.
@Jennifer Petrillo ok, so how long did it take to go to closing?
How long did the construction take?
Closing was four months, but that is because it was a foreclosure and things tend to move more slowly (depending on what bank owns it and how much they care about liquidating that asset). I think all the rehab that was done took a couple of months, but of course this varies depending on what needs to be done! And I also did some things on my own after the rehab, like having the wood floors refinished (out of my own pocket of course). The answers to your questions are different for every property.