New to Real Estate · NorthEast Ohio · Member since 2019 · 15 posts · 7 votes
Hey everyone. I haven't done my first deal yet. Considering a FHA 203k on a 4 unit. Is this a good idea? If not, any suggestions for somebody with limited capital seeking a cash flowing property?
FHA 203K can be a great way to get a good deal on a 2-4 unit that needs rehab. The results could be higher ARV and rents as long as the market supports. One downfall is 203K is not a super easy program when it comes to processing and time frame. You will need to supply 2-3 quotes from different General Contractor's or licensed builder for all work.
Some things that can occur are builder/vendor issues with lack of inventory, broken material, employee "no shows", date of completed work extensions, bad work, additional costs not factored on blue prints or cost analysis, delayed permits.
Keep in mind any delays or issues will slow down your clear to close/funding date. That can also cause issues with expired mortgage rates, rate lock extension costs/fee's. This is not a scare tactic its more of a buyer beware to do research and pick a good Bank/lender