203K

[Devonte Dinkins]

Hello Everyone,

I am a young investor interested in using a 203K loan to purchase a property. Does anyone know if you can use this type of loan to purchase any type of property specifically a four-plex? Also, does the property have to be a HUD property?

[Darrell Hardy]

I tell my clients these things to make the 203k process a bit easier:

1)Have a contractor day within during the home inspection period (get three to four contractors to come out to bid on the project schedule them about 45minutes apart. (If you don't know any liscensed contractor ask the lender if they have a list of contractors that have done 203k streamline work in the past.

1a) Get a GC rather than a bunch of subs because the 203k funds will get chopped up into absolutely miniscule disbursements that will make it difficult to get what you need done)

2) Have a fairly detailed scope of work prepared for each contractor and yourself and add/subtract items that may come up as issues when talking with each contractor

2a) itemize your scope, per unit, exterior,bathrooms, kitchens, electric etc

3) Do not waste precious streamline rehab dollars on appliances save that for Lowes'/Home Depot cards after closing

4)Make your contractors bring a copy of their and insurance so as to not waste time

Bonus points: If doing a home inspection see who is a HUD certified rehab consultant (these are the guys who do the big 203k's and hire one as a home inspector, I've found this to be useful for my client's who don't like to listen or who have no renovation experience) It kills two birds with one stone.

5) Do the major stuff first, convert oil to gas, do a roof if it really questionable

6)Be prepared to spend your own cash/ credit don't expect the streamline to do every single thing it is a very tight budget especially when addressing multi unit properties.

7)know that your real budget is 30k as the last 5k is actually fees and a modest contingency

I could write more but this should get you started