FHA or 203K Loan Lenders?

Question

I'm looking at getting into real estate with a house hack. The listing price is $99K and has been on the market for 400 Days +.

Since its been on the market for a very long time do you think it wouldn't be crazy to offer $80k? If that it too low should I start closer to $90k

Being a single family home with mother in law cottage, I should be able to get rental income of $800 while living in the cottage and a total of $1200 once I move out. It looks like it needs work but I can't tell how much work it actually needs from the few pictures on the listing.

I don't know much about real estate so I've been reading books and articles about the topic.

I used the credit karma pre-approval and got approved for up to $105K assuming the additional $800 rental income.

Depending on the actual condition of the house, should I go with a normal FHA or go with the 203K Loan to help with rehab costs?

Assuming I go the FHA route I'm looking at maybe $600-$700 for the mortgage.

Also I'm looking for recommendations for lenders.

Thank you in advance!

Paul Welden · Answer

Anything is possible. Depends on the market, the seller, other terms and conditions, etc.

Quenten Durbin · Answer

@Paul Welden I’m looking to limit out of pocket expenses. Do you think the seller would pay closing fees this low?

Greg Dorn · Answer

Make sure if you are considering doing a 203k you have a contractor that is okay with floating getting paid. They have to do the work, have a routine inspection and then payments are dispersed. The other thing to consider is that with the FHA if you have mortgage insurance then you can only get rid of it with a refinance.

Paul Welden · Answer

I think you should offer $70k-$75k. What do you have to lose?