Why Not Buy A Duplex And Generate A Few Extra Bucks?

Over the past few weeks I have been combining my blogs, 203k guidelines, links and housing studies into one website. With the website rebuild (I used wordpress Thesis and built it myself!) and the pick up in business I have not had a lot of time to blog. I hate to post blogs from my other sites but I wanted to get people thinking about buying two-to-four unit properties in todays housing market. Enjoy the read and checkout my upgrade at: 203kkc.com

Last week I closed a 203k loan on a foreclosed duplex in Los Angeles. Sad to say it was the first non-single family unit that I have closed in the last year.  The total PITI (principal, interest, taxes and insurance)  for the property was $1,292.00 with a projected rent for the second unit established at $1.050.00. That is not a misprint if the borrower rents the extra unit for the average rent for the area (established by the appraiser) he will only pay $242.00 a month for his portion of the mortgage payment.  The scheduled renovation to the property will bring the home up to code while also completing numereous deferred maintenance items that had been neglected over the years. By handling the repairs upfront the borrower should be years down the road before needing any major financial investment in the property. Past experience tells us that most landlords get into trouble if they have to make excessive repairs to the rental unit(s) prior to building up a deferred maintenance reserve fund, the 203k funds take care of that issue.

As you can image I receive lots of calls on how to finance income generating properties in today's distressed market.   Although an investor can not use the 203k to purchase/refinance a piece of property an owner occupied borrower can purchase a two- to -four unit property and use the 203k owner occupied guidelines to accomplish the transaction. 203k guidelines allow you to take a property that has more than four units and reconfigure the unit to a maximum of four units as well as take a property and redevelop a single unit in to multiple units (maximum of four). Mixed use properties are also allowed.

If you are currently in the market for a new home and interested in testing your skills in property management ask your Realtor to add two- to -four unit properties to your list of showings. Call me when you find a property, I would be happy to talk you through the 203k repair process and assist you in calculating your potential property income.