4th Triplex - FHA 203(k) Loan

[Anthony Torri]

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $280,000
Cash invested: $13,679

My first time using the FHA 203(k) for a primary residence purchase. This a great loan option for buying a home to live in that has issues that won't pass a FHA inspection. This house just had peeling paint throughout the wood siding, but everything else was fine.

What made you interested in investing in this type of deal?

I always loved victorian homes with the wrap around porch and wanted to house hack, this was a great combination of those goals.

How did you find this deal and how did you negotiate it?

Found on the MLS, purchased $10k below asking.

How did you finance this deal?

FHA 203(k). The rehab portion was about $19k and that was added to the principle of the loan.

What was the outcome?

The original contractor blew his deadline twice and is being replaced. I always looking for contractors that have been used by people in my circle, and this one was. I don't know what happened, but he just never showed up. This is one of the reoccurring issues that happens in real estate.

Lessons learned? Challenges?

Don't write off a property with no pictures. Usually, when a listing has only 1 picture of the outside, that's because the inside is in bad shape. That was not the case here at all. The seller's were trying to protect the privacy of the tenants and did not take any interior pictures. The interior was in very good shape and I think other buyers not knowing that is why I didn't have much competition.