All Forum Posts by: Matthew Porcaro

@Bradley LaBrie

They're not really going to look at how "tidy" your tenants keep it. They're most concerned with most recent CapEx improvements (with receipts to back it), and the rest is just hoping your comps support what you have.

Try to be as polished as you can when you present.

My appraisal after my 203k went pretty well. I just did everything they asked.

Hi Bryan - 

I have not personally used the HomeStyle renovation loan, but I used the 203k on my first BRRRR. I do know the differences between them though.

Overall, the 203k is easier on the borrower. With a 203k you can put down a lower down payment (3.5%) and can have a lower FICO score (580 min). 

The homestyle loan is easier on the rehab and property side. HomeStyle you don't need to live in the property. You also have a higher loan limit, and can wrap "luxury" renovations into the loan (aka, putting in a Sauna or something). The caveat to this is you must have a much better credit score (650+), higher down payment (5% minimum) and a lower Debt to Income ratio than a 203k allows. 

I second the 203k route. As someone who used it for my first flip, I believe with the right guidance, it is the cheapest and best value you can get on your first flip. It also helps to leverage yourself into future deals!

It’s tough, you are buying “as is” however it’s blatantly obvious the seller is purposely hiding structural issues. 

I’m glad you have your lawyer in the loop. This is something that your lawyer needs to counsel you on, and should work out to your favor to some degree, whether it be a concession or return of down payment if you feel it’s a deal killer. 

@Ronnetha Darrett

My first flip was using a 203k. I bought, flipped, and rent out my duplex all using a 203k loan. It’s definitely the best and cheapest way (if you can qualify) to get into real estate investing.

Feel free to PM me with any specific questions. I’m passionate about the subject and would love to help.

No, the lender does not give you one. They may have a list, but it’s not required. 

“Approved” contractors aren’t really any different than regular contractors. They may have just done one before. Any contractor can qualify. It really is just paperwork the contractor you want to use needs to fill out. 

As for finding a lender that does them, you MUST find someone experienced in doing them. Any mortgage broker will be happy to take your business, but this isn’t something you want to risk them learning on the fly about. 

Call around and ask your network if anyone knows anyone who has done multiple 203k loans. They are complex, and require experienced brokers if you don’t want to waste your time or take months to close. 

If you have anything specific you’d like to ask regarding 203k’s feel free to PM me. My first flip was a duplex I used a 203k on.  

@Leroy Wallace Jr was this property a foreclosure/bank owned?

Have you mentioned this to your lawyer?

@Nicole Camarao remember also, you need to be occupying the residence to use the FHA loan!

@TRUSTEN BROWN correct, you can put only 3.5% down with a 203k.

The rule for FHA loans is you're only allowed to have one active at any given time. Also, you must occupy the residence.

Jeff - congrats!

I too got into investing with an FHA driven house hack of a duplex I now moved out of and rent fully.

It’s a strategy that I think is the lowest barrier of entry, so long as you are patient and persistent.