Here’s one for the wanna-be real estate investors! Join us for a special FHA 203k Renovations Buyer Workshop. The session is Thursday, 1/5 from 6pm – 7:30pm at 913 Florida Ave., NW in Shaw. We’re right off the U Street/African-American Civil War Memorial/Cardozo METRO.
Here’s a question we’re often asked in our First Time Home Buyer Workshops:
“Can I buy a multi-unit property and live in one while I rent out the other unit(s) for income?” The FHA 203k rehab and renovation loan program makes this process simple and within reach for many ‘traditional home buyers.’ All it takes is a for-sale property that needs a certain level of repairs, updates or modernization. The FHA will help you purchase & renovate for just a 4% Down Payment, if you and the property meet certain conditions.
All it takes is a for-sale property that needs a certain level of repairs, updates or modernization. The FHA will help you purchase & renovate for just a 4% Down Payment, if you and the property meet certain conditions.
Here’s a simplified example of how FHA 203K works for the beginning investor:
- There is a $415,000 4 unit DC property listed for sale that is in need of repair;
- The $415,000 property needs $180,000 – $200,000 worth of renovations & updates
- It’s determined that the property will be worth $600,000 – $615,000 after the proposed updates, the FHA 203k loan will let you purchase for just a 4% Down Payment;
- Renting the units at a reasonable DC rental rate ($1,200/mo. or more) nets you $3,600+ per month in rental income that pays your mortgage (and more).
In this case, you live in 1 unit and you rent the other 3 units in the property for income. DC rents increase an average of 3% per year on their own…your long-term income grows with the area rents while your fixed rate mortgage stays the same! Current interest rate levels for these loans are typically between 4% and 5% currently.
Besides rents increasing 3+% per year, you have the overall value of the building for potential appreciation. These fixer-uppers often fall into ’emerging neighborhoods’ that have not seen full positive price appreciation yet. Time is on your side when your mortgage is paid for by your long-term tenants!
There’s a ton of small multi-family properties (2 to 4 unit) in the DC Metro area that are prime targets for the smart use of these mortgages! RSVP if you’d like to attend – it’s free!
We are real estate agents who teach! UrbanLand Company Home Buyer Workshops have helped DC/MD/VA buyers purchase $49 million in properties since 2014 using different types of financing programs that are available locally.