All Forum Posts by: Thomas O'Donnell

Hello all! I plan on moving to Columbus, OH within the next month and a half and purchasing a duplex with a FHA loan. I am currently having an issue getting pre-approved because I currently live in CA and I would need to prove employment for when I get to Columbus. I know I can easily get a job right before moving, But closing on a property takes a while and I would like to avoid renting month to month while trying to find a deal. I would really prefer to purchase and then move to avoid having to move twice or worry about renting somewhere short-term. I have a steady job with good income right now and I could transfer with my job or get a better one if needed. Unfortunately I work in security so the branch office in Columbus us will not be able to offer me a position until a couple weeks before moving. Does anyone have some advise on how I should approach this? I would love to find out if there are more creative ways I can go about this so that I have a duplex to move into when I first get there. Thank you to all who respond!

Hello all! I've been looking into the Indianapolis market recently as somewhere I might want to invest in the future. I'd love to learn about what it has to offer, and maybe connect with some of you who currently invest there yourself or work with other investors who do. Thank you to all who comment! (P.S. I like multi-family properties)

Quote from @Nick Riccio:

@Thomas O'Donnell condition of property definitely comes into play with the standard FHA program. That is definitely something to be aware of if you are looking for properties that will need renovation.

Yeah I understand that. I just don't know what extent of a rehab you can go to when using an FHA loan, if you aren't planning on using the 203k addition.

I guess what I'm meaning to say is that I want to do a house-hack but also add value to it up front so I end up not only adding equity but giving myself a little cushion should something go wrong. Would I still be able to obtain a property that needs a rehab using just an FHA loan without the 203k addition?

Quote from @Remington Lyman:

Quote from @Thomas O'Donnell:

Quote from @Nick Riccio:

@Thomas O'Donnell I've done major rehabs to my house hacks & I've also helped a lot of my clients do the same.

Few things:

1. I've always used FHA without the 203K component on my own deals. Reason for this is I've always been up against the FHA loan limits, and so I had no room to add the construction to my loan. I also have construction in my family - and now co-own a construction company with my wife. So, we are in this business as well and understand it, so no need to use outside people.

2. I help a lot of clients use FHA and FHA 203K. @Brad Hammond is not wrong, it is a tough loan. In my experience - you need your lender & realtor to be on the same page and support you with this. You will definitely lose on more properties than you win, but it's not impossible. I don't know your market, but in ours, two-unit properties are less desirable for true investors. Couple that with a property that is in very rough shape - and there won't be a ton of demand on it.

Why is that important? If you're going to use a loan like FHA 203K, you won't be the most competitive buyer. So find a property that also isn't very desirable, and make it work.

My personal strategy has been to find two-family homes (again, less desirable), and add significant value. We try to finish basement space when we can, and add beds/baths. This makes our numbers great - but we don't find as much competition which also helps.

Long way of saying feel comfortable sticking with your plan, but you will need to be both patient & creative. Best of luck!

Thank you so much for this response! It is truly appreciated. I’m moving to Columbus, Ohio. If I was planning to use an FHA loan without the 203k, and then do a rehab, what would you suggest in terms of financing the rehab? 

 The point of a so3k loan is they finance the renovation loan into the initial loan. Does that answer your questions or am I misunderstanding your question?

Since 203k loans are difficult to execute on, I was wondering if it makes sense to use an FHA to obtain a property that needs a rehab and then finance it in a way other than using the 203k addition.

Quote from @Nick Riccio:

@Thomas O'Donnell I've done major rehabs to my house hacks & I've also helped a lot of my clients do the same.

Few things:

1. I've always used FHA without the 203K component on my own deals. Reason for this is I've always been up against the FHA loan limits, and so I had no room to add the construction to my loan. I also have construction in my family - and now co-own a construction company with my wife. So, we are in this business as well and understand it, so no need to use outside people.

2. I help a lot of clients use FHA and FHA 203K. @Brad Hammond is not wrong, it is a tough loan. In my experience - you need your lender & realtor to be on the same page and support you with this. You will definitely lose on more properties than you win, but it's not impossible. I don't know your market, but in ours, two-unit properties are less desirable for true investors. Couple that with a property that is in very rough shape - and there won't be a ton of demand on it.

Why is that important? If you're going to use a loan like FHA 203K, you won't be the most competitive buyer. So find a property that also isn't very desirable, and make it work.

My personal strategy has been to find two-family homes (again, less desirable), and add significant value. We try to finish basement space when we can, and add beds/baths. This makes our numbers great - but we don't find as much competition which also helps.

Long way of saying feel comfortable sticking with your plan, but you will need to be both patient & creative. Best of luck!

Thank you so much for this response! It is truly appreciated. I’m moving to Columbus, Ohio. If I was planning to use an FHA loan without the 203k, and then do a rehab, what would you suggest in terms of financing the rehab? 

As crappy as it sounds, California does not help much with this. You could however offer them $$ to leave. I know it sounds bad and you shouldn't have to but it may be the only way to get them out.

I am also planning on house-hacking a duplex. What is your advise for rehabbing your unit while another tenant is next door (if rented out). It seems like the noise from any work would bother people, no?

Quote from @Brad Hammond:

Hey @Thomas O'Donnell, 203k loans are difficult.  You can obtain them but it is hard to get an offer accepted with them and harder to find contractors willing to work with a 203k loan.  There is more red tape, paperwork, etc.  One of the best things about a house hack is you can take your time to do the rehab.  You can work on your unit yourself while you live there for a year or two.  You will learn so much and keep your costs down.  Honestly, it might be the best learning experience you'll have in real estate.  

 Thanks for the reply! So if I'm planning on house hacking, what condition would be acceptable? It obviously needs to be in living condition but to what extent of a rehab would I be able to do?

Hello all! I'm currently looking to house-hack in Columbus, OH and was wondering if anyone has had experience doing a value add while using an FHA loan. I know there is a 203k addition to this loan, but I've heard it is difficult to obtain. I really wanted to get a duplex and add some equity to it through a small rehab but it seems very complicated. If I can't get it done, I will most likely be going with a turn-key property as my first. Thanks for any and all input!