All Forum Posts by: Jeff Onofrio

@Dana Harvey

While I understand your desires the programs you are talking about have strict time limits that need to be adhered to.  Fannie Mae Homestyle requires the repairs be done within 12 months and will have less restrictions than the 203k but you need to remember that the lender is securing your loan against the asset (this being your home) and as the note holder they want the work done to secure there interest in the collateral.  The longer the work goes undone the more risk for the lender.  I would look to do either program with getting the properties minimum property standards then fund the cosmetic work over time with your own funds.  Otherwise this strategy will probably not work.  

Hope this helps and happy investing.  

@David Thibodeau

Hi David- a 203k is not difficult as long as you have the right team in place. An experienced lender, contractor and HUD consultant if needed but I would recommend using one regardless if the program requires it or not. He will help insure you are protected and that the work is properly scoped out. Creating your team upfront will help to make it a smoother process.

You will hear from others that the 203k takes long and is pain staking - that normally comes from not being prepared.  

Good luck and happy investing.  

PS- feel free to ask me any question you would like regarding FHA 203k or FannieMae Homestyle- I have been involved in over 1000 of them from the lending side over the years and happy to provide you guidance.

@Colin C leamy- Hi Colin- I think the strategy works but here is how I would set it up to your parents.  

1- have them act as a non-occupant co-signor on an FHA 203k loan. FHA allows for this and it allows for you and them to both be on the mortgage.

2- get a HUD consultant involved regardless of the amount of renovation/rehab as this will provide a layer of protection (it should help to make your parents feel that you are adding this layer to protect you both). Normally you on need this person on a Full 203k but again the extra layer should help your parents to feel more comfortable.

3- offer to split any profits- either when you turn around and sell or even on the monthly cash flow if you go multi family- which would be my recommendation to help you offset the payment 

4- include everything you can into the project so that you are not relying on yourself to do the work on this first one.  take this one as a learning experience and let the professionals do what they do best.  prove to your parents that you can do this by managing the project.  

5- live in it for a year and move on to the next one! 

** side note- there are programs both nationally and locally that will provide for DPA (down payment assistance)- FHA allows for this - look into it- Cheona Fund is one that is available nationally. Secondly you can also get up to 6% seller assist to help offset your closing costs. So theoretically you could come to closing with no money and would only need your parents for getting your loan approved from a debt to income perspective if you wanted to go above your own personal budget.

Back to the strategy- I love this idea because you learn on the go but everything is not on you to do.  Use this opportunity to soak it all in and learn.  If you do this correctly you could be on your way to building a future using real estate and that is what we are all here for right? 

Happy Investing and hope this helps!  

@Stephanie Cabral - loan size does not matter.  It sounds like your lender might have been your issue then.  Was this a lender who does these everyday?  Do they bank the loans or broker? Do they have an in-house dedicated swat team that only works on reno loans?   All of these things could have impacted your time frame.  That seems to be the only missing info you provided above.  

@Stephanie Cabral - haha - that is an internal podcast for my sales staff but I would be happy to cut a small snippet out of the podcast/video and post for you to see.  19 days is not the norm but closing in 30 days is easy if you have the engaged buyer with a knowledgeable lender, contractor and consultant.  

The real reason these loans take longer is because of buyers not moving quickly when it comes to selecting contractors.  Typically if that part is hammered out upfront a 30 day close is not an issue.  I (and my team) did 406 of these deals (203k's and Homestyles) last year- the right operations staff makes all the difference in the world.  

Happy Investing!! 

The loan is only hard if the team you assemble does not know how to navigate the process.  I just did a podcast today with a member of my sales force who closed a 203k in 19 days.  Its all about the experience level of who you are working with.  Yes - is it a long process if the loan officer is handling one of there first deals- no doubt.  But look around, ask for recommendations, etc and you can have a smooth process.  

Good luck and happy investing! 

@Adebowale Asaya - checkout www.203kcontractors.com.  There are a number of contractors with 203k experience in the directory.  This site trains contractors how to do 203k's.  

Good luck and happy investing! 

@Elvis Vasquez Hi Elvis- I would need to know more details but typically a 203k will allow you to fix illegal conversions and get it up to code.   

Good luck! 

@Jason Wright Hi Jason and welcome to BP.  You can definitely get pre-approved for any loan option without a property.  This will help you to go through all the different loan options that are out there and help you to decide which product - A- that you qualify for and B- fits your specific needs.  USDA loans have some big limitations- the property must be in a USDA area and you have income caps.  203k is a great option if you find the right property.  

My recommendation is to speak with a loan officer that understands both products in detail - not many loan officers will be fluent in both of these products so get recommendations and read reviews.  

Good luck and happy investing! 

@Whitney T Redfield welcome to the community!  Love your passion! 

The 203k is a perfect vehicle to help you start your investment portfolio- some great benefits include: 

- ability to use future rent as a qualifier in your debt to income ratios

- ability to finance up to 6 mortgage payments if your home is deemed uninhabitable 

These are two really good provisions that can help investors (House hackers) to get started! 

Good luck and happy investing!!