I had a question regarding getting a FHA 203K rehab loan the property I am wanting to purchase was built around 1945 ( there is no Lead Paint ) as far as I can tell This is a distressed property , and needs around $20,000 - $25,000 in repairs done ( new roof, new A/C unit, painted inside and out, all new flooring, Bathroom remodeled some and the same with the kitchen, some electrical work ) The property is in a Trust , and my Mother is the Trustee of the property ( is was my grandmother's property ) The likely sell price will be about $55,000 - $60,000 ( this includes the pay off of the property, the repair costs, closing and the pre-paids )The pay off for the property is $29,000 The ARV ( from the research I have done, should put the property in the $85,000 - $90,000 range ) after it's fixed up I already have a licensed and bonded Contractor, lined up to do the work ( they have worked on and know all of the guidelines for FHA 203K loaned properties ) There is one thing I am a bit concerned about, and that is....

Generally, closing costs involve these: loan origination fee (a compensation to the lender, around 1% of loan), loan application fee attorney's fee, lender's attorney's fee, credit check costs, PMI mortgage insurance title search & title insurance for lender and title insurance for yourself.Seller prelim Title report :: hazards report :: Agent Commissions :: Existing Loan Payoff :: transfer tax/recording :: owners title insurance :: 2,400 (0.35 * sales price) attny fees :: liens / judgments :: hoa fees :: prorated property taxes :: ttermite inspection ::repairs (demand by buyer) ::Buyer Appraisal fee Origination fee Pre-paid interest Pre-paid insurance Flood certification fee Tax servicing fee Credit report fee Bank processing fee Recording fee Notary fee Title insurance

ACCEPTABLE USES:The following are acceptable uses for cash-out refinance transactions:paying off the unpaid principal balance of the existing first mortgage;financing the payment of closing costs, points, and prepaid items.

In the deal I did, I also prepaid the property taxes.

20% cash down 80% loan Fees: $7,500 Bank Loan Fee Prepayment Premium: 5% in year 1, 4% in year 2,3% in year 3, 2% in year 4, 1% in year 5 in each case on the then principal amount prepaid.

I bought an LLC book from NOLO which had a copy, so I morphed that one and the one the title company gave me and it was acceptable.I signed up for pre-paid legal through legal shield.

secondly, BK  recovery is not difficult for unsecured write-offs;  Apply for prepaid credit cards (they act just like a bank debit card). 

Besides being in the Army, I'm an independent associate with PrePaid Legal Services, inc.

I had $80k in my 401k pulled it all out prepaid the taxes took the penalty and used it on a down payment for 2 triplexes and a duplex.

Seems like too much of an administrative headache to do.Screen your tenants good and try to find someone who you think will keep it clean without needing a prepaid-maid.