@Josh Smith I bought my first home in 2011 using an FHA streamline loan. I bought a short sale home for $208,000 and borrowed around 15,000 to fix it up. I change the carpet, painted the house and remodeled all the bathrooms. Two years later I sold it for 295,000 and it sold in four days.
After that house I decided that I don’t want to put up with the headache of rehabbing again so I bought a home in DC in 2013 that was already remodeled. The seller flipped the house and walked away with $75,000 in his pocket. My parents were pissed off because they felt like I just made someone richer and that I could’ve done the same thing, which was true. But DC home prices were on the rise and my neighborhood was changing fast. My thinking was that he made his money now but I will make mine down the road. And I was right. My home price has doubled since 2013 and am sitting on 200,000+ in equity by not doing anything but just living here.
In 2019 I would use an FHA streamline to buy something and rehab it myself. Why? In Washington DC home prices have pretty much peaked. So buying a rehabbed home Wouldn't make sense because prices aren't going to go much higher. So I'd rather buy something low or at least try to in this hot dc market , Put in a little bit of work and know that I have a good chunk of equity after I'm done. The problem is finding that gem without having investors/developers snatch it from you.
The only headache I had from rehabbing were the damn contractors. Once the job started to come to an end they stopped showing up because they had started to pick up other work since mine was coming to an end. In the end I finally got it done and I got to say it was pretty fun. I got to pick and choose what I want in my “dream” home and remodeled it to my taste. It was a great learning experience and moving forward I know what not to do.
@Josh Smith I bought my first home in 2011 using an FHA streamline loan. I bought a short sale home for $208,000 and borrowed around 15,000 to fix it up. I change the carpet, painted the house and remodeled all the bathrooms. Two years later I sold it for 295,000 and it sold in four days.
After that house I decided that I don’t want to put up with the headache of rehabbing again so I bought a home in DC in 2013 that was already remodeled. The seller flipped the house and walked away with $75,000 in his pocket. My parents were pissed off because they felt like I just made someone richer and that I could’ve done the same thing, which was true. But DC home prices were on the rise and my neighborhood was changing fast. My thinking was that he made his money now but I will make mine down the road. And I was right. My home price has doubled since 2013 and am sitting on 200,000+ in equity by not doing anything but just living here.
In 2019 I would use an FHA streamline to buy something and rehab it myself. Why? In Washington DC home prices have pretty much peaked. So buying a rehabbed home Wouldn't make sense because prices aren't going to go much higher. So I'd rather buy something low or at least try to in this hot dc market , Put in a little bit of work and know that I have a good chunk of equity after I'm done. The problem is finding that gem without having investors/developers snatch it from you.
The only headache I had from rehabbing were the damn contractors. Once the job started to come to an end they stopped showing up because they had started to pick up other work since mine was coming to an end. In the end I finally got it done and I got to say it was pretty fun. I got to pick and choose what I want in my “dream” home and remodeled it to my taste. It was a great learning experience and moving forward I know what not to do.
@Josh Smith it really depends man. Building your own equity by obtaining a property that needs work at a discount to rehab is a great idea if that's something you'd ultimately be comfortable with. If convenience is something that's more important to you, you'll pay for it. With not rehabbing yourself, you will generally pay closer to market price (or possibly more!).
I am trying to see if I should buy a home already rehabbed or buy a home to rehab using the FHA or 203k loan with my first property to house hack
For a first time homebuyer I would definately encourage you to buy a rehabber. You will gain valuable experience and, depending on the quality of the rehab, gain faster equity which you can tap into for your next investment.
Like all investments though, it all comes down to the numbers. Make sure the work will actually increase the ARV substantially and that the house is in a desirable area so that you be able to sell or rent it out quickly so you can move on to the next.
Not to steer to far from the original topic, But I'm sort of in the same boat. I'm financing via VA loan and property has to be move-in ready. But I'm trying to figure out how I can use VA and still get a good deal?
@James Washington you can as long as there is not significant damage or conditions making the home inhabitable. Also, VA appraisers are EXTREMELY conservative in their valuations and this possibly could lead to you getting a greater deal than you may initially anticipate. I used my VA last year, initially offering a price above what the property would later appraised for. The buyer was forced to lower the price to the appraised value or go back to market (and continue making mortgage payments). Already being under contract almost a month and with me approved for financing, they continued the sale despite losing the extra anticipated money which in turn kept more money in my pocket