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Real Estate

Buyer Workshop – DC Multi-Unit Fixer Uppers: Using FHA 203k Renovation Loans


Here’s one for the wanna-be real estate investors! Join us for a special FHA 203k Renovations Buyer Workshop.  The session is Thursday, May 25 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.

RSVP

Here’s more info on the event.

“We showcase the FHA 203K program for the loan’s ability to enable first time home buyers to beat investor competition for up to 4 unit buildings in DC,” said Gerard DiRuggiero, Principal Broker of UrbanLand Company. “The goal is to live in one unit as the landlord and rent out to the rest to subsidize your overall mortgage for the building. The reason we love it is the owner-occupant landlord pays just a 4% Down Payment when you use FHA 203K. Investor purchasers who do not live onsite have to pay 20% Down. This is one of the only local sectors where you can beat the savvy investor buyer!”

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!

RSVP

We are real estate agents who teach!  UrbanLand Company Home Buyer Workshops have helped DC/MD/VA buyers purchase $41 million in properties since 2014 using different types of financing programs that are available locally. 

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