Well, it's official. After a lengthy process, I have finally put my first personal residence under contract. It is a 4-unit apartment building, which will allow me to utilize FHA 203k financing. If you haven't yet, I highly recommend you check out the article Brandon Turner wrote for BP that details how to "Hack Your Housing," and is what I am currently attempting to do. http://www.biggerpockets.com/renewsblog/2013/11/02...

I will keep this updated as a blog, as to show all details regarding what is happening with my deal. That way others can learn from what I am doing, and hopefully take it upon themselves to do the same. Here is a little bit about the deal:

4-Units--(2) 2BR, (2) 3BR.

Purchase Price: $85,000

Rehab Needed: $85,000

Total Purchase Amount: $170,000

Total Loan Amount: $164,050

ARV: $210,000

ARV Gross Monthly Income (3 Units Rented) = $700*3 ($2,100)

Less 10% Vacancy: $210

TOTAL OPERATING INCOME: $1,890

Taxes: $321.50

Insurance: $200

Maintenance Reserve: $210 (10% of gross monthly income)

Mortgage Insurance: $215

TOTAL OPERATING EXPENSES: $946.50

TOTAL NET OPERATING INCOME: $943.50

Loan Amount: $164,050

Term: 30 year fixed/30 year amortization

Interest Rate: 4.75%

Debt Service: $855.76

NET MONTHLY CASH FLOW: $87.74

So, as the saying goes, the numbers are just that--numbers. Now it's time to go make them a reality. I start making moves on Monday, when I hire my FHA Consultant, which is mandatory to walk you through the 203k process with any rehab exceeding $35,000. I will be back to update when possible. Let me know your thoughts--and a special thanks to all who got me to this point. Moving right along!

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Diary of an FHA 203k Loan Deal

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