Repairs on a FHA home

[Anthony Wilson]

Quick question, when buying a HUD or FHA etc. does all the work have to be done by licensed contractor?

[Tim G.]

Originally posted by @Jim K.:

In my opinion, the 203K loan program is designed to allow politicians to claim they're doing something real about urban blight and to enrich contractors who carefully work the system, not to help ordinary folks make wise property investments.

What is your experience with buying a home with an FHA203K type loan? 

I understand this is my personal experience but I'm passionate about these loans because it leveled the playing field for me against cash investors and allowed me to buy a cash machine property... In 2013 I put $15k down on a FHA203K $322k purchase + $30k renovations fourplex and have seen a 2000% return on my investment + $22k a year cash flow. It was one of the best financial decisions I've ever made in my life. 

The contractor I used likely charged me about 40% ($12k) more than if I'd done the work myself. But the work was done in under a month and they handled a large amount of paperwork and permits that I couldn't have taken on as a new first time investor. The lender isn't in a place to trust an unlicensed newbie to repair a property. This is a different type of investing that requires a capable contractor who is responsive to a lender and their requests. 

I'd do this deal over and over if I had access to these loans regularly. 

I've done two renovation loans on properties, if anyone wants to ask me any questions I am here to assist. They aren't easy but they can be amazing when executed properly. I've also written several detailed blog posts on the process and what is involved in making it happen.