All Forum Posts by: Ana Coello

Hi Isaac,

A 203k loan is a type of FHA loan. The great benefit of it is the low down payment of 3.5% but it does have the mortgage insurance premium that you have to add to your loan. Also, insurance rates tend to be higher for FHA loans than conventional loans.

You are also stuck with the private mortgage insurance forever on an FHA loan. The 20% down works on conventional loans only.

There are conventional rehab loans as well. We just got one. We pay 5% down and can get the pmi taken off after paying 20% down. The interest rate is higher than an FHA loan. It is also higher than a regular conventional loan. Since it is a REHAB loan you will pay the price. Good thing is that you can refinance out of it after 6 payments (check with your lender) into a loan with lower interest.

When we compared the 203k with a conventional rehab loan for the same amount of loan. We were able to have more money for the rehab with the conventional one and still stay at the same monthly payments. I would suggest working with a lender who does both and asking him/her to run both scenarios so you can see the breakdown of everything. 

Hello Everyone!

We are currently working on acquiring our first investment property. A SFH in Silver Spring, MD. We are putting an offer on this one house but want to get our ducks in a row since it is most likely a 203k loan that we would be working with. Do you guys have any recommendations for licensed General Contractors in the DMV/Montgomery County area that work with 203k rehab loans? Any info is greatly appreciated.

Warm wishes,

Ana

Hello Everyone!

We are currently working on acquiring our first investment property. A SFH in Silver Spring, MD. We are putting an offer on this one house but want to get our ducks in a row since it is most likely a 203k loan that we would be working with. Do you guys have any recommendations for licensed General Contractors in the DMV/Montgomery County area that work with 203k rehab loans? Any info is greatly appreciated.

Warm wishes,

Ana

The interest rate that you got on the 203k loan is 4.375?! How long ago? Which lender are you working with? I spoke with a lender yesterday and he said for a rehab loan (similar to 203k but not Fannie Mae) interest rate right now is 5.6. 

Hello @Kristopher Werner!

I was in your exact situation about 2 weeks ago. I googled "questions to ask lenders" and looked at youtube videos, etc. I also started with lenders that either knew me or that we were recommended to by someone they worked with a lot. Some of the questions I found really helpful were:

-Based on my goals, which programs do you recommend?

-What is the interest rate on that loan?

-Do you offer rate locks? How do they work?

-What are all of my lending costs?

-Will my loan have pre-payment penalties?

-Where does the underwriting process take place on my loan? (in house is faster)

-Will your brokerage sell my note? (After you close on my home loan, do you sell it?)

These are just some that stood out to me. And DEFINITELY talk to more than one lender. We have learned that not everyone offers the same programs/offers. They say the interest rate is about the same but the relationships, speed, and professionalism make a huge difference. 

Warm wishes,

Ana

Hello! 

I loved the book on Rental Properties by Brandon Turner. It’s written in simple language and gives lots of vivid examples. Easy fun read. I read it first and now my life partner is reading it. I love to hear him randomly laugh about something within the book while learning about real estate. To me, this book cohesively compressed a lot of the information I’ve been listening in the podcasts. Best of luck!

@Brandon Turner @David Greene @Joshua Dorkin

Hello BP community!

My partner and I are excited about our journey into real estate investing. We already got pre-approved on a loan amount and are looking to find a deal. We live in an expensive area and are trying to be smart about our first house. We want to house hack. We don't mind sweat equity and wouldn't mind getting a house that needs some work to make it work in our area. 

That said, we have found some houses that we think may work but when we get to the "BRRRR" BP calculator we have some questions:

-How do we factor in that the rehab is financed with a 203K loan? 

-Do we count the rehab money in the original purchase price? 

-Do we put "zero" for repair costs? 

-Is there a box missing to finance repairs or are we missing something?

Warm wishes,

Ana  

Thank you @Michael Plaks and @Andy Webb!

Hello BP community!

I have a big question. Here's the background: my partner and I have a realtor that sent us to a loan officer for us to talk to him about the best way to do our 2018 taxes to have the best chances at a great loan. Now we talked to the guy and he ran our credit and is in the process of getting us pre-approved (not what we initially wanted at the stage but ok) and we told him that we wanted to rent out the basement of our house and he said that was illegal for an FHA loan. We are looking for something in Maryland. Is that true? He is also saying that 203k loans aren't the way to go and that only one of us should be on the loan. I don't want to do anything illegal but how do people rent out rooms/basements and it being ok with the lender and everyone else? Any help is great!

Warm wishes,

Ana Coello