All Forum Posts by: Yang Zhou

Love this post tons of information.... I have 2-3 banks that offer 203k loans the scrutiny of the self sufficiency test maybe hard but not impossible. You can also consider a conventional rehab now that 2-4 units only requires min of 5% owner-occupied. feel free to reach out I would love to help. 

Hello Yang!

Agreed with @Paul Welden ... this is not a common loan product in NY. From my experience, 203Ks were more common 2016-2018. Today, many sellers see this loan product as a liability when compared to offers from conventional borrowers, cash buyers and even FHA borrowers. This could be due to lack of education on the seller's side and low inventory in NY which leads to desirable offers & terms for sellers.

That said, your strategy is solid. Targeting a property in need of renovation puts you in a sweet spot and lessens the competition for you. Traditional homebuyers and many new investors shy away from these properties. Experienced cash investors are disinterested once a property hits the market especially if it isn't listed at 50% ARV or less.

Whether or not your idea is feasible in NYC depends on your goals. If you're thinking cashflow immediately, you're better off upstate or OOS. If you're thinking long-term appreciation, steady rent growth, potential tax advantages, and... (eventually)... cashflow, then NYC may be worth a deeper look.

I joke about the 'cashflow' part here but it is possible within 1-3 years depending on the deal. One of our clients closed a cash-flowing Brooklyn 4-family under $1M in Q3, several others have found cashflow properties throughout NYC and its suburbs. Properties with ADUs are nice hidden gems to look out for as well.

All the best to you on your search!

Abel

@Yang Zhou

I think the 203k is feasible anywhere. 

In NYC area, a 4-plex can have a 203k loan up to $2,211,600 with only 3.5% down payment plus you can use 75% of the market rent (as determined by the FHA appraiser) from the 3 units you will not occupy as additional income to help you qualify for the mortgage.

HUD.gov has 2 databases of the lenders with the most experience with 203k's. Let me know if you want help with them.

Finding a Realtor with 203k experience can be quite challenging considering only 141 FHA 203k's were closed last year in NYC area. The 2 most important team members IMHO are the Lender and the Contractor. Best to use a contractor with verifiable 203k experience/education, such as a Certified 203k Contractor. 

Hope this helps! 

Welcome to the Chicago BiggerPockets forums @Yang Zhou!  Amazing work to already have two properties under your belt.... especially during tough times like these.

I'm always open to partnering up on the right deal - Are there any specific neighborhoods you are looking to target?  With that said what...type range of purchase price do you expect to be in?

I can help with some experience and renovation expertise.