New Member interested in 203k loan West Kensington, Philadelphia

[Thomas Caridi]

Hi all,

I've been listening to the Bigger Pockets podcast for a little while and this is my first post so I apologize if this is a repetitive topic. I'm a first time homebuyer looking into the West Kensington area of Philadelphia. I rent in Fishtown but that neighborhood is heavily developed to the point where decent 600-700 sq ft homes sell for up to $300k. I like the area around Norris Square Park (West Kensington) and prices for fixer uppers are mostly under $100k. I'm interested in the FHA 203k loan because I haven't found many turnkey homes in the area that I like, and like most millennials I don't have enough saved to put down more than 3.5%. I also think it's a great way to build some quick equity in a developing neighborhood.

The houses I'm looking at are pretty small 2 bedrooms, 650-800 sq ft max. I know the answer to this is most likely "depends", but are any contractors or investors on the forum that have 203k experience in Philly that could ballpark renovation costs for something that size? It would be my primary residence for at least a year, so I'd want it to be nicer than a standard rental rehab i.e. hardwood floors throughout (maybe bamboo to cut some of the cost), exposed brick walls, 1.5 baths, subway tile in full bath, central air/heat with exposed ductwork, rooftop deck if city approves & budget allows (not a necessity though). Something along the lines of this one: https://www.redfin.com/PA/Philadelphia/2134-E-Tuck...

Thanks in advance for any info!

Best,

Tom

[Perry Farella]

You might just figure costs on a square foot basis, like $90 a square foot for a major reno. We do that here in Chicago. Watch out for unexpected items the city may insist on to get building permits. Like a new non-lead water pipe from the street into the house, especially when they see you adding extra water service points like a dishwasher, laundry, extra bath that are not there today which may need a large diameter copper water pipe, which can be very expensive to dig up the street etc. I always tell people to go to the city Zoning or Planning dept. to ask specifically what will be required for a given house in terms of securing building Permits. You may find extra expenses to budget for. Your 203k construction consultant should also have valuable experience in this area. You can even have the 203k consultant prepare a Scope of Repairs document prior to making an offer. My Blog has many stories of how 203k works if that's helpful to you.