My business plan going into 2014 calls for me to seek out buyers and owners in need of a renovation specialist. Some houses need only cosmetic renovation, while others require the whole package. I have chosen not to job out the contractor services to my clients, but instead maintain objectivity by remaining in a advisory capacity, will a willingness to remain part of the team until the renovation is completed and fully funded.
The renovation lender specialist is another important part of the team. However, don't be sucked into looking only at the 203K FHA loans. Lenders that specialize in these types of loans also have conventional renovation loans available. I am not affiliated with Wells Fargo, but they have three types of renovation loans available to qualified buyers.
As stated below the FHA 203k loan is the best option to finance the repairs...but in your situation you may consider another option. (Since the 203k will REQUIRE you to use approved contractors for the work.) If you want to do the work on the home yourself, you may consider putting less money down (minimum downpayment is usually 3.5%) and then use the remaining money you have set aside for the downpayment toward the repairs. You may even be able to do these both together. For example, if the foundation and roof are a problem you could get a 203k loan (with 3.5% down) that includes those 2 repairs (since you will likely get a contract for them) and then the paint, carpet, etc could be done using the remaining funds. However, you may find that having all of it done by a contractor isn't that much more expensive than doing it yourself.
I will also reiterate the advice you already have.....make sure that you choose a lender that has experience with FHA 203k loans. They are more time consuming, they have more paperwork, and you really need someone whith experience working for you.
If you need further assistance, please feel free to check us out on-line and give us a call. Our agents would be happy to help you!
Coldwell Banker Jane Henry Realtors
North Texas Top Team, Realtors
I don't think you can get a 2nd for rehab. Probably what you need is FHA 203k, which allows for loan with rehab money on draws. However you must use a contractor and cannot do the work yourself. They're tricky. I would only use a loan officer who is very very familiar with these types of loans....otherwise people will just wast your time. You also have to find a seller that is willing to work with you as these can take extra time and effort to close.
The first step is to get with a lender and make sure you can qualify for the 203k and discuss with them the ins and outs and see if it is something that works for your situation. I can give you a referral to one of our experts in this area if you are interested.
If it works for you then we can go scouting for homes.
REaltor, ABR, E-Pro, GRI
Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors