Hi, I'm new to the forum. So, I'm sorry if I'm posting this in the wrong place. My partner and I live in Salem, Oregon and we are looking for a realtor who specializes or has a lot of experience with rehab loans (203k or Homestyle or ???). Does anybody have any recommendations?
We both work in the architecture field and we're trying to buy our first home. So we keep finding old houses that need some TLC (we like getting our hands dirty) but our realtor keeps pushing us away from those homes. We recently found a house that we loved and made three separate offers on it and got rejected all three times. Even though our realtor told us that he had experience in rehab loans, we discovered in the process that he'd only done a few rehab loans many years ago...and it showed.
Just a couple humble opinions from an agent here in Oregon...
The supply of entry level housing is very low, keep in mind that trying to get an offer with any kind of a rehab financing accepted in this market is tough - so I'm not sure I'd be so quick to throw your REA under the bus just because your offers were rejected.
With that said, you are correct that it's your REA's job to understand how your rehab financing works and to find a way to make the seller comfortable with it. Most sellers (and their agents) are uneasy with rehab financing for no other reason than they are unfamiliar.
More important than your agent's experience with any specific type of loan program - you really need to sit down with a lender who has sufficient experience writing this kind of loan. Ask how many rehab loans they've written this year when you call to set up an appointment - if their answer is less than 5, call someone else. Once you find an experienced lender you are comfortable with, get a pre-approval letter and get the loan program details to your REA. A good lender will be happy and available to work with your agent to explain the ins and outs of the loan program and differences in timelines, inspections, and appraisal that typically come with a rehab loan.
Prepare yourself and your patience for what could be a lengthy process. I have buyer clients right now that are pre-approved for 203b/203k loans and have made offers on 15 houses in the last 12 months. You might also consider private money, a seller carried note, or expanding your search area a bit out of Salem proper - those are a few things off the top of my head that might get you into your first home a little quicker.
Mark Da Cunha I am from Salem as well. Also working on alternative financing for cash only or rehab properties. I'm working with a lender but haven't purchased anything yet.
Hi @Laura Smith. The market is tough right now. There's so much competition for investment properties right now, it's crazy. We've got a broker/lender that seems to be pretty knowledgeable about 203k and Homestyle loans but when we put in an offer stating that we'd be utilizing one of the loans, our realtor didn't really know how to approach it. It also sucks when some home owners won't even consider a rehab loan. I don't know which is worst. Well, I hope things workout for your first deal. Good luck out there!
More than a realtor, it's critical you work with a lender who specializes in renovation loans. They're very complex and your LO needs to know what s/he's doing.
Thanks @Michael Cohen. I guess we need to reevaluate our broker as well. Both our realtor and broke are really nice and came highly recommended but we're unconventional clients (with little capital) looking for an unconventional property. I'm just curious on how to find the right realtor/broker to help us in a small conventional town like Salem?
Just a couple humble opinions from an agent here in Oregon...
The supply of entry level housing is very low, keep in mind that trying to get an offer with any kind of a rehab financing accepted in this market is tough - so I'm not sure I'd be so quick to throw your REA under the bus just because your offers were rejected.
With that said, you are correct that it's your REA's job to understand how your rehab financing works and to find a way to make the seller comfortable with it. Most sellers (and their agents) are uneasy with rehab financing for no other reason than they are unfamiliar.
More important than your agent's experience with any specific type of loan program - you really need to sit down with a lender who has sufficient experience writing this kind of loan. Ask how many rehab loans they've written this year when you call to set up an appointment - if their answer is less than 5, call someone else. Once you find an experienced lender you are comfortable with, get a pre-approval letter and get the loan program details to your REA. A good lender will be happy and available to work with your agent to explain the ins and outs of the loan program and differences in timelines, inspections, and appraisal that typically come with a rehab loan.
Prepare yourself and your patience for what could be a lengthy process. I have buyer clients right now that are pre-approved for 203b/203k loans and have made offers on 15 houses in the last 12 months. You might also consider private money, a seller carried note, or expanding your search area a bit out of Salem proper - those are a few things off the top of my head that might get you into your first home a little quicker.
@corey westermann that sound like good advise. The lender I just started talking to is the one who brought up rehab loans to me so I assumed he had experience writing them. I originally was looking for a HELOC on my current PR in order to purchase a property for cash so I could rehab it on my own and then refinance into a conventional loan get a renter and then repeat the process. Do you know is a rehab loan the better way to go? Or should I stick with my HELOC plan?
@Corey Westermann, thank you for your feedback. I don't mean to throw my REA under the bus. He's been really great and I'll gladly recommend him to anybody who is looking to make a conventional investment/purchase. I guess we'll start making some cold calls to try and find a new realtor and lender with some rehab loan experience. Thanks again!