@Edly Destine good luck to you in finding your first hack. Please be cautious of using a 203k loan. 203k loans can be useful, however, I have found that the costs involved far outweigh the benefits. When you utilize the 203k program, you are in essence borrowing the "governments $$" to "fix" the home. They end up very involved. With this heightened involvement, they have strict requirements, and lots of paperwork, that most contractors aren't crazy about (time = $$). The contractors who do these also do not get paid right away. So what happens is the contractor takes the job and has to pay out his/her subs, however the lender (you know, the feds), doesn't just release money weekly, like these guys like. So, the contractors have to front a good portion of labor and material for each project. In my experience, that equates to a 30%+ mark up in almost every job I have seen done. To put it into some perspective: I am getting a SFR- ranch roof replaced next week. The labor is going to cost me $2,000 and the materials roughly $2,200-$2,500. I am getting this 17-18 square roof for well below $5,000 because I am using cash and there is no rep tape, extra paperwork, etc. If I had to use a contractor who had to front this $$, it would cost almost twice as much because he/she isn't getting paid for weeks.
Another thought, is to head the advice of some of the other guys out here that mention working with wholesalers, or trying to find deals on your own from motivated sellers. If you can lock up a nice deal, use private lender for the entire purchase, then do a re-fi in 6-12 months once your project is complete. If all you have is the 3.5% on a $600k purchase, then you might be limited, however, there are so many other creative ways to purchase properties. I just had to share my views on the 203k from a different perspective. Yes, the 203k can be good, but it can also be expensive and "net" you less of a "deal." My $.02
