First of all, thanks for taking to time to read my cash flow properties blog every week. Cash Flow Properties helps investors understand the market in South Florida specially the investment side of it. Buying fixing and selling and renting is the core of the company.
It’s no secret that there simply aren’t enough homes for sale in Miami’s top neighborhoods to meet the demand for them. So many buyers today are getting creative, buying homes that are in dire need of full rehabs and paying for them with what are known as rehab loans.
One of the most popular of the rehab loans is the FHA 203(k) loan. This type of loan allows buyers to include both the purchase price of their new home and the estimated rehab costs of the property into one purchase loan.
For instance, say you find a home in need of significant repairs that only costs $120,000, which is pretty cheap for the Miami area. You’d then have a contractor tour the house, consider your plans for it and estimate how much it would cost you to rehab the residence. Say your contractor says it will take another $150,000 to restore the home you want to buy. You would then take out an FHA 203(k) loan for the combined sales price and renovation costs, a total in this case of $270,000.
There are other rehab loans available, but they work mostly the same way. And for each of them, you’ll need to provide written documentation from a contractor with an estimate of how much money you’ll need for the home repairs.
You’ll have to meet typical mortgage guidelines to qualify for these rehab loans. If you can swing the costs of a rehab loan, though, it might be a way to fight the low inventory facing Miami buyers today. And when those repairs are done? You might have your own Miami dream home.
If you are interested in learning how to invest in properties to fix and sell (fix and flip) or fix and rent, please contact me at 954-274-8511 or visit my website www.CashFlowFL.com our our new Cash Flow Properties Academy www.CashFlowPA.com.