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All Forum Posts by: Matthew Porcaro

Matthew Porcaro has started 8 posts and replied 434 times.

Post: Where did you start from? How did you finance your first deal?

Matthew Porcaro
Posted
  • Rental Property Investor
  • Long Island, NY
  • Posts 443
  • Votes 327

@Trent Thompson

The 203k helped me finally get my very first house hack / BRRRR deal under my belt.

I purchased a distressed duplex for $270k, wrapped the $80k rehab cost into the loan making the loan $350k total.

In 6 months after the rehab was complete the house reappraised for $480k, and since then has appreciated to $520k in just 4 years.

In addition, I’ve never paid the mortgage on that since moving in, as my tenants paid it while I lived out the first year. Once I moved out I started cash flowing $2k a month.

The 203k is wildly powerful and as long as you have an experienced team on your side during the process you will be fine.

Post: Thoughts on this property rehab

Matthew Porcaro
Posted
  • Rental Property Investor
  • Long Island, NY
  • Posts 443
  • Votes 327

@Mackezi Spear

It’s won’t be too big a project to take on, as long as you have an extra 20% of a construction slush budget tacked on.

The only thing that can screw you is under estimating a rehab.

I’d say, as a contractor, that 80k estimate looks a bit light.

You need to find several other contractors to bid this, and ensure they’re licensed, insured, and fully vetted with good references.

Post: Purchasing Duplex using FHA

Matthew Porcaro
Posted
  • Rental Property Investor
  • Long Island, NY
  • Posts 443
  • Votes 327

@Andrea E.

I agree with Andrea! I did the same thing on my duplex.

My team wasn’t too great, and I learned the hard way. Make sure you start finding contractors early and developing a list that you can call when you’re ready for a bid.

You can build a ton of equity on the deal if you buy right and make sure your building will cash flow at your loan amount.

Post: Seller's Concession vs. Low Appraisal

Matthew Porcaro
Posted
  • Rental Property Investor
  • Long Island, NY
  • Posts 443
  • Votes 327

@Nyle Emerson

The 203k allows you to have a loan at 110% of after renovated value so it could buy you some wiggle room.

If your appraisal comes back too low, the reality is you’re not buying right.

In the NYC market right now especially, there’s no reason to be overpaying for a property.

Keep all the concession as you’ll need it for closing costs. If the appraisal comes back too low, renegotiate the purchase price. Contingency or not.

Everything is negotiable in real estate.

Post: Rehab loans besides 203k?

Matthew Porcaro
Posted
  • Rental Property Investor
  • Long Island, NY
  • Posts 443
  • Votes 327

@Devyn Caraballo

203k’s are not as daunting as they seem.

Problem is there are people that know nothing about it, spreading misinformation because they don’t understand it.

There’s professionals out there that are experts with the 203k and make it a pleasant experience.

Fact is the 203k loan is way too powerful to ignore.

Does it take extra paperwork and due diligence? Yes.

But nothing good comes easy.

Just my two cents.

Post: Looking for GC with 203k experience in the Inland Empire

Matthew Porcaro
Posted
  • Rental Property Investor
  • Long Island, NY
  • Posts 443
  • Votes 327

@Andrew J Hart

I’d ask your professional network for referrals. A consultant can give you a list but often will make you sign an affidavit stating that they didn’t steer you towards any specific contractor.

Either way, you should always vet a pool of contractors, sprinkle in some referrals as well as cold leads from places like Angies list etc.

At the end of the day you should look for the most highly regarded and reputable contractors in your market.

Post: FHA 203K loan- What do you know?

Matthew Porcaro
Posted
  • Rental Property Investor
  • Long Island, NY
  • Posts 443
  • Votes 327

@Jonathon Nila

Time to start analyzing deals! I talk about how I did in my book if you have that. Use that as a reference!

Of course, if you have any specific questions don’t be shy to reach out.

Good luck!

MP

Post: Advice for a newbie in Houston

Matthew Porcaro
Posted
  • Rental Property Investor
  • Long Island, NY
  • Posts 443
  • Votes 327

@Megan Hodges

Megan knows what’s up!

The 203k loan is the best way for a beginner to build quick equity in this game.

I bought my first duplex for 270k, wrapped the 80k renovation costs into the mortgage for a loan total of $350k

After renovating I had $130k in equity, (it was worth 480k when I was done) and lived for free in the meantime by renting out the other unit.

If you have any questions specifically about the 203k reach out!

Matt

Post: FHA 203K loan- What do you know?

Matthew Porcaro
Posted
  • Rental Property Investor
  • Long Island, NY
  • Posts 443
  • Votes 327

@Jonathon Nila

Absolute best decision to make. I did the exact same thing you’re doing. Bought a distressed duplex and house hacked it.

If you find a good lender, the rest will fall into place.

Also, get your contractors lined up early, otherwise you’re going to be scrounging for them while you’re in contract and that’s not fun.

Post: 203(k) loans. Good idea or Bad idea?

Matthew Porcaro
Posted
  • Rental Property Investor
  • Long Island, NY
  • Posts 443
  • Votes 327

@Eric Kulling

Lenders shoot themselves in the foot by not understanding or attempting to understand this loan.

It’s by far one of the most powerful ways to build equity on your first deal.

It changed my life after struggling for 4 years trying to “break” into real estate investing.

There are plenty of good renovation loan lenders out there you just need to know where to look.

One thing I’d point out is you’re looking at a jumbo loan at that price range.

Look into homestyle renovation loans since they’re a little more forgiving on the mortgage insurance which will be big at your numbers.