FHA 203k program and BRRRR method

[Mike Sola]

Is it possible to combine the FHA 203k and the BRRRR strategy? I understand you can use this loan to make household repairs but to what extent?

[Maxwell Fontaine]

Hey @Mike Sola,

203K loans are great if its your first property. The good far out ways the potential negatives. There are 2 203 loans which is the 203B which is mostly cosmetic renovations not allowed to move any walls is really how they define it. Then the 203K which is much more in depth and larger rehabs like additions or rebuilding parts of the property. The contractor does in fact need to be approved but its based on the cost of the rehab. Its a very good product to use if you want to get your foot in the door. Remember you don't need to hit a home run on your first deal. If you eliminate your cost of living (rental expense) you are still essentially making that money every month anyway.

They aren't a BRRRR tool because the purchase price and rehab is calculated together in the appraisal.

Hopefully that helped out a bit. Reach out if you have any questions.