All Forum Posts by: Matthew Porcaro

I'm in the middle of one now. In the beginning, but as long as you have a lender familiar with the process, and a punctual/approved general contractor, it's one of the best ways to get into your first property for low money down. I am currently in contract for a foreclosed duplex I found through Homepath. The plan is to rehab the home with the 203k, and live in one unit and rent out the other to cover most if not all of the mortgage. Once I have enough equity built in I will refi out and go into the next property. 

There must be something you're not telling us or something blatant you are missing. It's not the easiest thing in the world, but banks are in the business of making money. If your portfolio shows you make money "hand over fist" that should be a huge green light for these lenders. The fact of the matter is, there's more money out there waiting to be lent out than there probably is in circulation. The money is out there and it's ready to be sold a good deal.

If you're goal is to stiff him AND fire him, you're going to have a hard time. If he feels he is rightfully owed money for work he has done, he will file a lien. Or he may not. If you pay him up to date then fire him there's nothing legally he can do.

If they're selling it 'as-is', when you offer on the property you are essentially waiving that you are offering without any contingencies. Unless you try to submit an offer with inspection contingencies, but chances are they will immediately reject it. 

Most crucial things to look for are:

• Condition of the mechanical, electrical and plumbing systems. "checking the lights" isn't going to tell you if the system is up to code, or if the electrical service is relatively up to date. Plumbing you can't really do too much other than checking the water main coming into the house and check the date on the boiler.  
• Structural components - check for cracks/water in the foundation. Also in the basement, check the floor joists and supports. Check spot and record any water or mold you see anywhere in the house. 
• Roof/exterior. Look at the roof, usually just by looking at it you know if it needs to be replaced. Do you see any rotting in the sofits/fascias?

I would bring someone who knows what they're doing from a construction standpoint. An inspector is the only way to be close to sure, but obviously they cost money. 

Understand how much cost the rehab will be, and be aware that in order for you to be approved for the 203k, the appraised value after work done needs to be more than the loan amount. So if the repairs are more than you'll get out of the home, you will be denied. 

@Jeremy Taggart I'm not sure. From what I hear I just think the streamlined 203k is quicker paperwork wise, and doesn't have as much monitoring by the lender during the construction process. 

Originally posted by @Jeremy Taggart:

All of the comps I found were recent sales, but were duplexes. The garage isn't in the greatest shape, but could probably get away with painting it and fixing the gutters and it would still be fine for awhile. I would probably end up updating one or two of the bathrooms/kitchens a bit they're perfectly functional now just dated. I would say maybe use 20-30k for renovations and see how nice I could make the place with that to take advantage of the 203k.

 If you're going to be under 30k, look at the streamlined 203k. It's an easier process and worth it if you're only doing a lipstick rehab. 

@Austin Mudd the 203k is the route you would need to take to rehab a multifamily. A 203k loan can be lent out for up to a 4-unit building. I'm actually in the process of trying to buy a duplex using a 203k loan. There is some red tape on the 203k. A few notable points are hiring a licensed contractor approved by the bank for the repairs of the property, having to live in the property for at least a year, and essentially only look for Fannie Mae/HomePath foreclosures. There's a lot of paperwork, coordinating, and requirements, but if you have your ducks in a row it's a nice way to force some appreciation into the property with the rehab. 

Start with the free courses here: 

https://www.biggerpockets.com/real-estate-investin...

From there, identify your goals and how you want to flip/invest. You need to have some sort of guidelines you want to follow. 

Not just - "I want to flip houses". It should be something like "I want to find distressed duplex properties and fix them, rent them for 5 years, then sell them." The criteria needs to be specific or else you will experience information overload. 

You want to see that they pay their bills on time, and what their debt to income ratio is. If you see they have say, 8 different credit cards, 4 of which are for clothing stores with $2,500 balances on each, that should raise a red flag. 

If they're renting, they're obviously not the perfect candidate anyway, you're just looking for evidence of lack of dependability. 

Hey @Jared Paul - my family's general contracting company has been in business for over 30 years, and my father has over 40 years of experience. I as well have been involved with projects, both retail and investor side projects for the last 10 years. 

Disclaimer: we are not going to be the cheapest contractor you find, but you can count on us to control the entire construction process start to finish with ease. We have subcontractor relationships lasting over 10 years, which experienced people know goes a long way when you're pressed for time and budget. 

Feel free to contact us with any projects you have available.