Any success (or failure) stories with 203k

[Ginger Walker]

I am in the NOVA (Northern Virginia Area) and been looking at possibly doing a 203k to do a semi live in flip. We plan on living here for 2 -3 years so the idea is to sell when we move and hopefully have a little bit larger chunk of change so we can have more to invest when we move back to Oklahoma. Then when we move we will purchase a multi-family house live in one part and rent out the others using either a conventional loan or VA loan depending on the amount we have saved at that point. I am a little nervous about the 203k process because it seems like FHA tries to make it as difficult as possible and of course you are not guaranteed that the appreciation will be there, though more likely than just buying a property and hoping for it to go up in value. Would love to hear about others experiences with the process!

Thank you!

[Joe Norman]

Great idea!  A few thoughts, first is to make sure you are working with a team that is familiar with the 203k program.  This includes your agent, your lender, and your contractor. I think that most people's bad experiences with the program stem from not working with a team that knows their way around the program.

You're right that appreciation is not guaranteed - but that is true whether you go with a 203k or a traditional purchase.  My advice is to NEVER count on appreciation.  What you can count on is creating equity if your purchase price + rehab cost is still less then the home's after repair value.  Again, a good real estate agent should be able to help you out with this.

Good luck!