203k loan and Forced Equity

2 Replies

Hey @Terrence Caldwell , you will basically need to figure out what the property will be worth after the rehab (ARV- after repair value) and work backwards from there. Once you have that number, subtract what the construction costs would be as well as the price of the home. If that number is worth it for you, go for it!

@Terrence Caldwell the 401k question is entirely separate question from the ARV question. But to do the BRRRR method you will need to know exactly what the above post mentioned. You'll need to know how to calculate that ARV AND you'll need to know how to calculate the rehab costs as well. Both are somewhat difficult to know how to do without experience so try finding some good people in your area who are already doing this and maybe they could help with these things. There are some good real estate clubs in your area that are free to network with and Bigger Pockets has a pretty active PA forum as well if you would like to post.

Oh, and the 401(k) question - I have not purchased a property in my 401(k).  It's not a bad idea....but your financing will be limited and you'll need to know the specific rules to it.  I prefer to invest outside of my 401(k) because my options are better.  There's an entire forum on this subject to.  

Lots to know for sure but keep searching and you'll get your answers.  Thanks!