All Forum Posts by: Matthew Porcaro

There are so many different strategies to finding off market deals. I'll tell you how I found my own primary residence in a very competitive market as well. 

My wife and I drove the entire neighborhood and took down every address of a property that we saw ourselves purchasing. We were looking for fixer uppers in a very specific area of Long Island NY, and were only looking for Capes, Colonials, and ranches. 

The more specific your criteria the better, because it makes the next step a lot more efficient. 

We then mailed to all of the property owners using Ballpoint Marketing mailers. They're about 1.80 a piece of mail, but they're handwritten and sent on greeting card style stationary. 

I mentioned that me and my wife were outgrowing our apartment and looking to move into the area. The response rate was great, and we ended up finding an older lady who was moving to a senior living facility and wanted to sell the house as-is with no contingencies. We used a fannie mae homestyle loan to take it as-is and renovate it using the banks money. 

The Facebook/Craigslist strategy works too. 

 I know a year may seem like a long time, but remember real estate investing is a long game. When I got my first duplex using a 203k, especially it being a fixer upper, the renovation alone took almost 8 months to complete. I wasn't in the property very long until I had the ability to refinance and continue on my journey. 

Dollar for dollar its the best way to start and your money will go a lot longer in the long term. 

As far as finding properties off market, I wouldn't focus too much on wholesalsers if you're looking to do a 203k or homestyle reno loan. I'd focus on agent outreach. Go to zillow and sort by lowest prices in your market. Call every single listing agent (include pending sales) and let them know your criteria. Keep them on a list and follow up with them. If there are agents that are receptive, invite them to coffee or a lunch and build those relationships. 

My flipping business was entirely built on agent relationships. At the end of the day they're the ones that get the lowest hanging fruit. 

Other off-market strategies work, but you have to be willing to put the time, money, and effort into sticking with it long enough to see results. 

203k Fees are not inherently high. Some lenders put overlay fees on them because they don't specialize in them and see it as a headache. There are lenders out there that have no overlays on their 203ks, they're the lenders that specialize in renovation lending. You need to shop the origination points. I've seen some go as high as 5-6% which is egregious.

Every branch is different, but look into Cross Country, Guild, Cardinal, & NJ Lenders

Ok well, that was misleading. There's no contractor list. Any contractor that is licensed, insured, and experienced can do a renovation loan. I've worked with countless contractors that have no problem doing this process. It's really not much different than hard money draws. If a contractor has done insurance work, they can do 203k loans. 

 This isn't true. Where did you hear this from? 

@Austin Martinez

Thanks for the shoutout, Scott!

Hey Austin! I love your idea because it’s exactly how i got started with investing.

I’ve helped hundreds of people replicate the process. the 203k loan is insanely powerful when leveraged correctly.

The fact is, many people don’t have the patience or the resources to pursue it effectively.

I work pretty hard to help clear the air for people looking to take advantage.

To answer your other questions.

2. The best way to find a 203k loan is by working with lenders of brokerages that specialize in these types of renovation loans.

There’s plenty of these guys and gals out there. You just need to look for their circles.

One easy one is google the 203k endorsement summary. Go to the HUD page and scroll down to the bottom to the most recent month and year.

It’ll spit out a report that tells you which companies have done 203k’s in your market.

Call them up and ask them who heads up their reno loan dept.

That way you have lenders that understand the process and can make it easier for you.

3. You can absolutely use a 203k for offmarket deals. I’m in the process of doing another one myself found using off-market leads.

As long as you find a seller that isn’t looking to close on an exact date, you can still purchase as-is, beat up properties.

Hope this all helps my man!

Matt

@Philip Roedig

Definitely don’t use someone that hasn’t done it before lol. That’s the most classic mistake people make. Myself included.

There’s plenty of experienced 203k lenders on Long Island that you can use instead.

You can look up Intercontinental Capital Group, Mortgage Possible, Caliber Home Loans to name a few that I know of off hand.

@Thomas Hoyla

You can look up the 203k endorsement summary (Google it) and search for the most recent report (bottom of the page)

Do a search in the document for your market and you’ll be able to see which lenders in that market are doing loans there right now.

Contact those lenders and you’ll have a great starting point. Don’t be afraid to lean on them for advice!

@Simone Douglas

Hi Simone!

A few things:

1. Construction just tends to drag itself out, even with a sound project management plan. It’s just the nature of the game.

I always tell people to figure double the amount of time you have planned, especially as a beginner.

2. My plumber had a heart attack midway through his work while he was roughing in. He also happened to be the owner of the company, and everything kinda fell to **** after it. He’s ok thankfully, but that obviously put a good 30 day damper on things. We couldn’t continue until he finished his work.

3. Permits, waiting for inspections, and sign offs. Sometimes to town took a while for inspections. Try to make sure your conteactors schedule your inspections ahead of time and use it as a drop dead date for your

@Jeremy Ramey

203k isn't an investor loan. It's an owner occupied FHA loan that requires you to move into the property and make it your primary residence.

That isn’t to say that the property can become an investment for you in the future. I used mine to do a live-in flip, lived in it for a little while, then moved out and rent it out. I built a chunk of equity and it cash flows nicely now.

As for lenders, there’s two ways I suggest looking for the most active 203k lenders in your market.

#1 is to use the 203k endorsement summary (Google it). It will give you a list of every lender doing the 203k’s in each significant US market. Make a short list and call down the list and ask each brokerage who in their office specializes in the renovation loans.

#2 is to leverage 203k consultants. There’s a directory of consultants online. You can call the ones in your area and let them know you’re looking to do a 203k and ask if they can give you a list of banks that they’ve dealt with in the area (hopefully successfully).

Good luck - hope this clarifies a bit for you.