All Forum Posts by: Jared Stroebele

Sounds like slab foundations should not worry me with rentals but I should be aware that the pool of people willing to buy the home should I decide to resale may be smaller.

Thanks for the advice and input everyone.  In many of the homes I have looked at the basement was a problem area. I think pursuing a slab foundation home may turn out to be a good idea. 

@Alex Bock No not in Ridgeview though I have been meaning to take a look at that neighborhood. The new construction in there might add some value to the older parts of that area (or I could be off base). There is also FourKids LLC doing a nice looking rent to own in there on Pine (I want to meet them), and there is that possible foreclosure on Volquardsen that I was going to follow up on and see what happened to it.

@Chris Pohlson Thanks for the info.  Would a whole home inspection be able to identify Vermiculite insulation? 

@Joseph Ziolkowski thanks for the info.  It is good to know even if all the plumbing needs replacing it won't kill the budget.  The house appears to have a large one car garage and an attic that may be available for additional storage.  I'll be walking through early next week hopefully get a better feel for place.  

I plan to do a 6 month live in BRRRR and a slab foundation home has come to my attention off market that will be available soon. I am currently located in Davenport Iowa, and have personally never lived in a slab foundation home.

With the slab I won't have to worry about water in the basement or mold, but there is less  storage and/or finish-able space.  I understand that there is also risk involved with the plumbing  a pipe encased in concrete will be harder to fix/replace than one in the ceiling of a basement or in a crawlspace. 

The home was built in the early 1950's that avoids galvanized plumbing what else should I be worried about?

What impact should I expect the lack of a basement have on property value/rent value? How much is unfinished basement space worth on an appraisal?

Does anyone have positive/negative experience they would be willing to share?

Are there any other pros or cons that I should be considering?

House Hacking seems to be done to lock in favorable owner occupied financing. Either low money down or better interest rates.  It also provides an "easy" way to get the 1-2 years of landlording experience that banks often require for full-fledged investment property.

I would run the numbers but if you have the 25% down for a larger commercial building and are already living in a discounted mortgage situation it might be better to stay in the duplex and manage an 8 unit you don't live in. 

@Alex Bock

So an update on the payment question. It depends on what sort of 203k loan you use.

There is NO up front money on a Full 203k project: 

The Full or Standard 203k is a reimbursement program. The contractor must complete some work prior to calling for an inspection. The consultant will inspect to see the work was completed in a professional, workmanlike manner, then sign off so the lender can pay for that work or percentage of work that is complete.

203k streamline:

Can get money up front to start the job. Typically the loan closes and six weeks later you get 35-50% of the money to start the project. Evidently you can insist the first half is paid from escrow without a wait but I don't know if that makes it go much faster.

I am attempting to do the full, so this does not bode well for my project.  I did line up two bids but neither of the companies had done a 203k job... 

@Alex Bock

I am actually not sure I know that the money is put into escrow at the beginning of the project and you are allowed 3-5 draws from the escrow to pay.  The initial draw should be enough for permits and materials, and additional money is released as work is completed.  "The Book on Flipping Houses" by J Scott does not recommend paying for work until it is complete anyway.  

There is a quick article on getting a 203k loan Getting an FHA 203k Loan. It is lacking detail but is a pretty good overview. 

The 203k loan consultant in Davenport is Russell Upton.  He has some contractors that do 203k loans but indicated that they were pretty busy right now.   I think using the consultant is like training wheels it sounds like they are supposed to help with a lot of the details. Role of a 203k Consultant.

I would enjoy meeting up.  I also have zero experience I have done a lot of research and am anxious to get my first deal under my belt.   

I am looking at a property to purchase with a 203k loan in the Quad Cities area particularly Davenport, IA.  I am hoping to purchase a home rehab it, live there a year, then sell or rent it.  I have a property in mind and am ready to get bids.

Does Anyone have a capital G General Contractor they would recommend using. I do not think I have worked less than 40 hours a week in the last year so I do not want to watch the subs or worry about work being done.  That being said I do have a fairly flexible schedule and do not mind dropping in every day to check on progress.   

Thanks in advance for the help!

You could alway try out a HUD or Homepath property during first look phase. They are government owned foreclosures that are open to owner occupants before they are available to investors.