203(k) loans; any success and horror stories?

Question

Hello BP!

My name is Randy. I’m brand new to REI and have read many books/articles and listened to hundreds of podcasts. I’m getting closer to taking action each day (paying down consumer debts and student loans to free up cash). I’m looking to hear about other investors stories using FHA type loans!

Matthew Porcaro · Answer

@Randy Merritt

The 203k loan was the best thing that ever happened to my real estate buying career. It enabled me to purchase a bank owned foreclosure and build equity into it without needing all cash.

If you play your cards right, it’s very lucrative because you’re putting such low money down.

The process is daunting if you let it be. My project had a lot of road bumps, but what project doesn’t?

The best advice I can give is make sure you pick professionals that are VERY experienced with these kinds of loans.

Find a lender that does 203k loans and homestyle loans; or even specializes in them. There’s a lot of these out there, you just need to interview them and gauge their experience.

Also find general contractors that are experienced with these as well if you can. A google search for 203k contractor “your market” can usually snag you some guys that are experienced with these types of loans. If you can’t find any in your market, any contractor with great reviews and comes highly recommended, and is licensed insured and bonded can do just fine. Just gauge their comfort level with the draw process.

Hope this helps,

Matt

203(k) loans; any success and horror stories?

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