All Forum Posts by: Bill Rich

@Bill Rich, I went through the 203K process 8 years ago, I’m doing another one now, and what he is saying was/ is true for me. The lenders are detached from the process, contractors need to be paid, and the owner ends up making up the difference. And, yes, if you don’t have a dumpster or doorknob accounted for, it’s an out of pocket cost, or a bunch of paperwork. Anyone entering a 203K should have 20% of the project cost available to spend at will and the MAY get it back as a change order at the end.

Hi Nate

I am sorry that your experience has been less then excellent. Unfortunately there are lenders out there who do not take a hands on approach to these loans AFTER closing. Its important to work with a lender who handles the entire process in-house and one who understands the complexity of the loans and has the know-how to complete the project, not just get the loan closed. For example my team actually handles the draws and works with the the borrower (you), the GC and HUD consultant (when there is one) from the beginning until the very end. My draw admin sits right next me so I know that we handle this the proper way. If you ever have any questions please let me know. If you are already working with a lender and have closed I wont be able to help too much because you are unfortunately stuck with how they process the draws.

Hi Bill I’m looking for a company that does 203k loans…sounds like this is in your territory? Please help!

Hi Sharon

I can certainly help, but I see you are in Georgia and unfortunately I am not licensed in Georgia.

Thanks for your reply. Is there anyone in your network that you could refer that’s based out of GA? I know it’s a stretch…

Unfortunately I do not know anyone.

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Originally posted by @Sharon M.:

Originally posted by @Bill Rich:

Originally posted by @Nate Bell:

Hi Nate

Hi Bill I’m looking for a company that does 203k loans…sounds like this is in your territory? Please help!

Hi Sharon

I can certainly help, but I see you are in Georgia and unfortunately I am not licensed in Georgia.

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Gabe I think you and I spoke a few years back as well through the Rehab Loan Network.

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Originally posted by @Gabe Sirkin:

Everyone is saying I can't because it's not currently set up a residential. Obviously the end result will be 100% residential, with 3 units. The way I would see this is it's just a 3 unit property, so comps would be 3 units.

Originally posted by @Bill Rich:

Hi Gabe

You actually can do a 203K on this deal. It will be tricky for a few reasons but it is possible. First thing is you need to make sure that the end project will have the residential space occupy at least 51% and the commercial space at 49% or less. If the current setup does not meet this requirement it would still be ok as long as the finished product is 51/49. Second hurdle and the more difficult one will be finding comps. I have done a lot of 203Ks of mixed use properties whether they were garage conversions like this or church conversions, the challenge is making sure you have comps. If you can meet these 2 items than over you should be fine with a 203K.

It 100% does not matter how it is setup now. It matters in the end. I do a 100+ 203ks a year and have seen scenarios like this.

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Hi Gabe

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Originally posted by @La'Terrius Campbell:

@Bill Rich Thanks for the reply! Also what's a good interest rate for a FHA 203K loan? I know they will be higher than a conventional loan because of what all they offer and the leniency on credit scores, but what is a good ball park interest rate for this specific loan?

No problem! Rates for 203Ks, just like any other mortgage, are credit score sensitive. That said if you have a 740 or higher I would be at about 3.25% with an APR of about 4.42%.

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Hi La'Terrius

There are 2 programs out there as Brandon mentioned, the FHA 203K and the Fannie Mae HomeStyle. Both programs allow you to buy the property AND financed needed and/or desired repairs. With the FHA 203K you are required to occupy the property and you can do a single family home up to a 4 family property. With the HomeStyle you can do 1-4 family properties if you are occupying the home. The HomeStyle does also allow you buy 2nd homes and investment properties as well but these must be a single family home. I hope this helps. Any other questions please fire away.

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@Patrice Boenzi can I ask why you would want hard money over a conventional mortgage?

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@Fareed Simpson Hankins congrats on taking that next step. With the goals you have you don't have to look very for financing options and ones that would not be as expensive as a hard money loan. The 2 loans that are most common and not at all difficult to complete are the FHA 203K and the Fannie Mae HomeStyle. The downpayment for a 203K for a 1-4 family is 3.5% and with the Fannie HomeStyle it is 15%. I am well versed in these loans and would be happy to answer any questions you may have. Good luck!

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Originally posted by @Bryan Rodas:

@Bill Rich thank you so much for your answer! I'd appreciate it a lot if you help, I have so many questions. I'm trying to get as much knowledge as I can.

No problem at all. Shoot me a message so we can connect.

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All Forum Posts by: Bill Rich

Bill Rich has started 1 posts and replied 112 times.

Post: Any cons to using 203k Loan?

Post: Any cons to using 203k Loan?

Post: Financing for Owner Occupied - 3 unit conversion from commercial

Post: Financing for Owner Occupied - 3 unit conversion from commercial

Post: Financing for Owner Occupied - 3 unit conversion from commercial

Post: Coming up with rehab money

Post: Coming up with rehab money

Post: Hard Money Loan - Owner Occupied

Post: Questions about financing a rehab

Post: How can I get the money for the purchase of the house and rehab?