I'm looking to purchase a home as a rental property that needs a decent amount of repairs, probably upwards of $20k, but I don't have the cash to make them after the down payment. I've heard bad things about 203k loans, but I am open to it if that is my only option.
Does anyone have any experience working with a 203k or know of any alternative to financing repairs?
@Andrew Futty under $35,000 is a streamline FHA 203K. Pretty simple process. You need to get all of your bids in order before the lender takes the application. This will make the process go much faster. These can easily be closed in 30 days if you have all of your bids in order
@Andrew Futty If you go into the 203k loan process with reasonable expectations as far as the timeline from contract to close it will be a good experience. People who do not take the time to learn the ins and outs of any process have unrealistic expectations and that leads to their frustrations, 203k is no different.
I have had several clients here in Connecticut that have purchased using a 203k loan, and from those experiences I highly recommend working with a realtor, lender, contractor, and lawyer/title company that have experience closing 203k deals. Why? They can prep you on how the process will unfold based on their experiences and most importantly they will know how the handle the bumps in the road that will inevitably come from purchasing a home through the program.
In the end, any client I have worked with that has done a 203k deal ends up satisfied because they created value on the buy side and now have a house that is renovated with equity to spare. Focus on that throughout the process and it will get you through the frustrating days.
Do you plan to occupy the property? 203k loans are for occupant owners.
@Christopher Phillips hit the very first question you have to ask yourself on the head. If you are not planning on living in this property, then the FHA/203k is not an option for you.
FYI with the 203k, I am fairly certain that you are not allowed to do the rehab on your own. IE, you have to hire a contractor, and as compare to DIY, makes things much more expensive. Just food for thought.
Also, if it is NON owner occupied (non FHA eligible), PM me, I might be able to help connect you with some reasonable financing for a fix-and-flip.
@Andrew Futty on a 203K the most important part of the process is getting everything upfront. Have all your bids lined up and ready for the loan officer and the process will go much smother
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