All Forum Posts by: Jeff Onofrio

@Account Closed - glad to help! 

Happy investing and reach out anytime! 

@Account Closed - the 203k is not a separate loan- it is the same financing you will use to acquire the property but the difference is the loan program allows you to create a renovation budget all in the same loan.  It is through your same lender.  You need to be pre-approved for your max financing but the loan officer should be able to explain to you your overall max finance which would include the renovation budget.  

@Curtis Wortham Are you planning to make this new property your primary as that is a requirement to use the 203k?  If so than this works.  

You could refinance out of the 203k and take cash out assuming the equity position is there at the end.  

@Davidson Francois glad to help! 

@Quandra Adams - your lender is correct and somewhat incorrect at the same time. 203k's allow for any renovation related fees- such as the HUD consultants work write-up ($400-$1000), draw inspections (up to $350 per and max of 5), title bring downs (typically about $100 per), architect (if your using one), engineering (if applicable), etc are allowed to be financed into your renovation budget. Then your 3.5% down payment is based on your purchase price plus your renovation budget (the whole budget including the fees listed above).

I hope this helps and is not confusing.  Good luck and happy investing! 

@Curtis Wortham - this method is the best.  I'm a huge believer in doing it this way and the 203k is the gateway to getting you started.  Couple of key points that really separate the 203k from other products include: 

- ability to finance up to 6 months of mortgage payments while the renovation is being completed if the whole is listed as uninhabitable by the HUD consultant. This can be huge for your strategy.

- being able to use projected rents when purchasing a multifamily to be able to qualify

- ability to convert properties and increase or decrease units

@Abel Curiel - you are correct - rates tend to be higher- normally 1/4 to 3/4% higher depending on factors and timing. 

I am a huge fan of this strategy (when done right!) and have worked hand in hand with many people doing the same.  Your heading in the right direction!

Good luck and happy investing! 

@Davidson Francois plenty of contractors are willing to work with renovation loans.  For them its money they know is there and is guaranteed as long as they do the work as detailed out.  Draws do not need to take long- if you work with a lender that has there own draw admin team then getting draws out timely is no big deal.  Good contractors with strong paper work skills to go along with good workmanship and you have a recipe for success.   Here is a directory with contractors who are "certified**" in 203k (which means they will do Homestyle as well).  www.203kcontractors.com

** I asterisk certified since there is no true certification for Homestyle and 203k loans but this site does a great job of training contractors and the owner is a Realtor! 

Good luck and happy investing! 

@Bill Rich Tim- Bill is licensed in Michigan and knows the K inside and out.  Good luck! 

@Tim Vander Ploeg Hi Tim. You can definitely do this loan in your name only. You do not need to refinance it out unless you need to have your wife on the loan to qualify. If you do need her and do not want to refinance out of the current FHA than the property must be over 100 miles away from your wife's current property.

If you are going regular FHA or 203k but in your name only you are good to go!

Hope this helps and happy investing! 

@Jose Vazquez @Ryan Murdock you are correct on the 203k and the LLC questions. 9 times out of 10 you will refi out of the 203k because they typically hold somewhere between 1/4 to 3/4% higher rate than a 203B (regular FHA loan). If you do it correctly and get the instant equity that we normally see I would than recommend refinancing into a conventional loan. From there start the process again and use the 203k to buy your next one. You can really go from one property to another once a year if you employ the house hacking strategy properly.

Good luck in your investing!