Investment properties can be a huge profitable venture. Many options to consider, and with an experienced Realtor, will increase your final investment dollars.
Want to buy an investment property? Refinance or renovate an existing home? Found a property you love but the renovations could be a nightmare?
I’ve been helping buyers and sellers for 20 years, and many of my clients are lifetime customers that have grown their future equity “portfolio” with my creative ideas and assistance one property at a time.
Myth #1: There is a lot of paperwork for the 203k loan.
Let’s be honest with each other, there is a lot of paperwork involved when getting a mortgage… period. No matter what type of loan you will be asked to provide required paperwork and additional information the lender asks for. There is additional paperwork needed for the 203k loan but is it mounds and mounds more? No, not at all.
Myth #2: Sellers won’t accept that kind of financing.
Many sellers and realtors believe that they will not be paid until the renovation project has been completed. However, this is untrue. All the renovation/upgrade work is done after closing when both the seller and realtor are paid.
In fact, it can benefit a stubborn seller or help sell a bank owned property because the home is sold “as-is” meaning, repairs don’t need to be made prior to the closing of the sale. Not even a conventional loan can offer that, with a conventional loan any health or safety violation of any kind must be fixed prior to closing.
Myth #3 Only FHA approved contractors can be used.
FHA approved contractors are not a real thing. The FHA does not have a list of contractors you must use or a list of those who you can’t. It’s true, you may come across contractors that advertise their experience with 203k but that does not make them a preferred or approved FHA or similar lender contractor. Hiring a contractor who has gone through the process of a 203k is a good idea because he or she is familiar and can help talk through things. But most 203K qualified Mortgage lenders may have their own network of choice of contractors.
Myth #4: FHA 203k loans are only for homes needing major repairs.
Almost all homes qualify for 203k financing except for homes built within the last 12 months. Homes in need of major work and homes with minor changes- like new cabinets or interior paint can qualify. In fact, the 203k Loan is a great solution as a refinance for properties which don’t have a lot of equity in them.
Myth #5: It takes several months to close a 203k Loan.
The process to close a 203k Loan should not take any longer than 45-60 days. If you are working with an inexperienced lender, the FHA 203k or any other kind of a home loan can be a long, drawn out process. However, if you are working with an experienced 203k team and both the homebuyer and realtor do what is required the 203k will run smoothly. If you are considering a 203k Loan, be sure to have a consultation with your mortgage banker at the start to ensure everyone is on the same page!
One of my partners, “AnnieMac Home Mortgage” will give you the widest range of options and the best customer service available in the home lending industry.