Realtor · Winston Salem, NC · Member since 2019 · 10 posts · 5 votes
Greetings everyone! I’m brand new to BP and real estate investment, but so excited to get started.
After consuming every piece of info I can get my hands on, I think I've got my strategy figured out. I'd like to house hack a 2 - 4 unit property in need of rehab with an FHA 203(k) loan.
I have two questions:
1. I’ve heard before that the contractor used with a 203(k) loan cannot be affiliated with the purchaser. Is there any truth to this? My dad is a GC, so I really have never thought of working with another contractor on my first deal.
2. How realistic is it to plan to BRRRR out of the property after 1 to 2 years? I assume it would depend on what the property appraises for after rehab just wondering if folks have had positive experiences with this method.
That is true, you will not be able to use your father with a 203k.
Cashing out will all depend on purchase price and appraisal. With an FHA 203k you have very little equity in the property. To cash out refinance with conventional on a MFR you would have to have at least a 70% LTV. With FHA you start out with an LTV of 96.5% including renovations.