House Hacking 2nd property

[Jerell Edmonds]

Hey BP I'm currently looking at options for my second house hack . Has anyone had any luck with a 203k loan for a MF? Is it worth it? All my properties will be LTR I don't care to much for cashflow it would be nice but its highly unlikely in my area . So forced appreciation is my goal for my 2nd HH. Just wondering the process , I currently have a FHA for my 3 family . Any guidance would be greatly appreciated.

[Abel Curiel]

Quote from @Jerell Edmonds:

Hey BP I'm currently looking at options for my second house hack . Has anyone had any luck with a 203k loan for a MF? Is it worth it? All my properties will be LTR I don't care to much for cashflow it would be nice but its highly unlikely in my area . So forced appreciation is my goal for my 2nd HH. Just wondering the process , I currently have a FHA for my 3 family . Any guidance would be greatly appreciated.

 Hey Jerell, 

We close a few 203Ks with clients each year. Some of the deals have even been on the verge of falling apart.

The main factors we've seen that make/break 203K deals are:
1. An agent that knows how to underwrite the deal and present the offer in competitve markets where conventional and cash buyers offer strong terms
2. A lender that can actually close. Anyone can write a pre-approval letter but the back-end process for renovation loans is more complicated than a typical FHA loan
3. A contractor with 203K experience OR a solid admin team. There is a lot more paperwork required from the contractor as the bank is directly responsible for paying the GC throughout the rehab process.
4. Identifying your HUD consultant/team early on. FHA requires HUD consultants to review the deal including the contractors estimate, scope of work, etc. This insures that the contractor is not just throwing random # s in their estimate and is accounting for all labor, materials, etc.

All the best!

Abel