All Forum Posts by: Eric Dufault

I actually talked to the second largest 203K mortgage lender in the country and yes they have their approved contractors but if your contractor can provide 3 references which are similar to the work needed, the bank will consider approving them as long as they are licensed, insured, provide tax info. etc. I'm actually taking my test for my CSL and think that being a 203K approved contractor would be a pretty good niche where you could make some money when not investing. Thanks everyone for the great input so far!

@Nathan Samuelson , I think you misunderstood what I was saying about the VA loan, there are actually extremely stringent and not open to the idea of a fixer upper. I was suggesting the VA loan as an answer to not having a lot of money down. Sorry for the confusion.

@Nathan Samuelson

here is a link with a lot of the details involving 203k loans as well as 203k streamline loans.

I am looking into doing something similar but you are supposed to be the owner occupant for these type of loans., These loans only require a 3% down payment. I'd also look into a VA loan through USAA where you can actually deduct points to lower your down payment to virtually nothing by increasing the APR, if you are looking to sell the property quickly the interest rate won't really matter. Thanks for your service.

Thanks @Chris GIllins I'd plan on living there for at the least a year before either selling or refinancing it into a rental property, propbably shouldn't have used the term "flip" in the subject line. Also reading through again, the licensing is the key issue where I'm going to run into trouble. For anyone interested here is a great link to the guidelines of 203K's. I read through it yesterday and probably should have consulted it again before posting this to the discussion board:

http://203kcontractors.com/faqs#max_loan_amount

Moving along though, I'm curious where you could throw $35K at and expect the most bang for my buck.

Good Afternoon BP,

I'm playing with the idea of doing a 203K Streamline Mortgage on a distressed property, inhabiting it for a little while, and then putting it on the market. I'm looking to do a majority of the work with friends who work in the trades in our spare time. For those who aren't familar a 203K Streamline tops out at $35K you can finance, ontop of the initial offer on the property, for rennovations. I live in Massachusetts where real estate is a little more pricey that a lot of the country and am curious if I can realistically expect to turn a profit with only $35K for rehab costs? What should I be looking for in a property other than structural soundness, nice neighborhood,etc. specifically what makes one distressed property more profitable than another?

Thanks for your input and have a good one.

Good Afternoon BP,

I'm currently looking into purchasing a multifamily that I intend to occupy for until I can get another property. This will be my first investment. I'm going this route because I am utilizing a VA Home Loan and whatever property I purchase needs to be my primary residence in order to qualify.

I am curious what are some of the strategies to adapt in order to avoid having to deal with tenants banging on my door every time a light bulb goes out. I plan on forming an LLC, having rental checks emailed to my work address or a PO Box, and pretty much pretending to be a fellow tenant. I'm a very forthcoming person and usually wouldn't consider these options but they might be the best way to go. In order to be successful, sometimes you have to step outside of what youre comfortable with, so I'm looking to this forum for advice.

I'm looking for people who have been in a simiar position and are willing to share some lessons learned.

Thanks for your time.

-Eric Dufault

Hey Nick,
Congrats on the home in Cotuit, I actually work for the Town of Barnstable's engineering department and am extremely familar with all of the different neighborhoods throughout. If you have any questions that I could help you out with as you look for more properties in the area by all means don't hesitate to ask. I've just recently found BP and think its an amazing forum. I'm personally just looking into buying my first property but it never hurts to network. I mainly work in Civil Engineering but have an angies list account if you have specific work youre looking for I could just pass along who is the highest rated in the area. Also a little further down the line I'll have my CSL but I wouldn't be comfortable reccommending myself to someone else until I do a few projects on my own. Anyways like I said if you need any help don't hesitate to ask.

@Aaron Montague @Andy Robison

Thanks Guys, both of you guys were helpful. Good luck Andy, feel free to let me know any lessons you learn through your experiences with this approach and I'll do the same if you want. Aaron, have you ventured outside of Boston at all with your investments?

Hey Everyone,

I'm new to the site and so far have been blown away by the amount of input everyone who has experience is willing to share with someone like myself. Thank you for that. I'm in the housing market looking at multifamily rental properties and am finding a lot of value in homes that are outdated and need to be updated. I've demolished to studs and rennovated one foreclosure in the past and can say that I am somewhat confident in my ability to perform a cosmetic rehab ie. new sheetrock, flooring, cabinets, appliances, etc. I do have a few questions as to what you feel are solid investments in the above if I am looking to hold a property long term as a rental.

1) What upgrades improve the price you can ask for rent?

2) What uprgrades/materials should I be looking into doing if I plan on turning a project into a long term rental property?

3) What type of improvements should I be comfortable doing myself vs contracting out besides electrical/plumbing/HVAC?

4) What do you look for in a home that could be a successful cosmetic rehab or even as a flip?

5) What tools should I invest in if I plan on doing this every couple of years?

I understand these are broad questions but any information or direction you guys could provide would be appreciated. Thanks for your time and have a great day.

Hello Everyone,

I'm interested in utilizing my VA Loan or FHA Loan towards a mortgage on a multifamily home that I intend to occupy along with tenants. I have enough for 3.5% down payment for the FHA or to cover closing costs for a VA. I would like to live in the home for the minimum amount of time before refinancing and utilizing either loan with little money down again to purchase another, and repeat this process until I have a nice portfolio that is still managable or until I no longer qualify for lending.

I have some questions before embarking on this investment and this seems like an awesome forum to have them answered. If any of my assumptions are incorrect feel free to let me know. I am going to lay out my current plan and then highlight some questions I have.

I'm looking at a duplex to start in the area of $200K to $230K that I could get with essentially nothing down and not buying points through the VA loan. I could buy points and reduce the APR by about .75% but since I plan to refinance this seems like it would be a waste. Or I could put $7K down with a FHA loan and still have the VA loan in my pocket. I intend to live in the residence, then refinance and move onto a similar property. I understand I am going to incur closing costs each time but I am willing to take that up front to accumulate multiple properties.

1- Should I utilize the FHA first time homebuyers loan or the VA for the first property and how long do I legally have to wait to refinance either loan?

2- Are there going to be any legal ramifications to my plan?

3- If I refinance the VA loan does that free up my full entitlement($417k)?

4- If I refinance am I going to have to have a certain amount of equity in the property I'm refinancing in order to get approved?

5- Should I skip paying for points on the VA loan up front? (closing costs would be only $650 up front at 4.5% versus $7300 at 3.75%) and assume I can refinance at a lower rate and then pay the points?

Thanks in advance for your time.