FHA/Rehab Loan

[Joseph Schriever]

Hi Guys,

I have a potential house right now that I am looking at. Massive 3700 square foot three unit house in Down Town Buffalo. The house needs a heavy amount of work roughly around 60k in renos depending. It requires a cash purchase or FHA/rehab loan as it will not pass inspection right now. The house is asking for 120K and once rehab is completed the house will easily be worth 230K and up. If an entire house renovation is done (not just whats needed but cosmetically as well) the house could be worth almost 300K as houses in the area that have one less unit are selling for that range right now.

First floor apartment has 3 bedrooms-can rent for 900+, Second floor has 2 bedrooms-can rent for 800+ and third floor has two bedrooms-can rent for 500. 

My question is, who has worked with FHA/Rehab loans before as I am very inexperienced in this field and it makes me nervous but this could be a massive opportunity that I do not want to miss out on simply because of inexperience. Stories, experiences, knowledge is all welcome, anything you may know or have gone through with this would be great.

Thank you for your help!! 

[Kyle Gregg]

I am about to finish up the rehab phase of a 203k in several weeks. 

I found several contractors on 203kcontractors.com and had them all walk the property and put together a proposal for me. I selected the contractor that worked best for me and pushed forward. 

You also need a HUD Consultant.

If you dont have any estimating experience, be careful with analyzing properties. Just as a reference, my 1000 sqft, 2bed 1bath rowhome received a full gut rehab and it cost me $68k with mid-level finishes. Seeing that you threw out 60K for 'a heavy amount rehab' in a 3700 sqft house sounds really low. 

I would get contractors in the house before even submitting offers. You dont want to put yourself in a bad position. 

Feel free to ask more questions.