“Beer Budget and Champagne Taste”
Brenda wanted to own a nice three bedroom ranch, but her budget was $150,000. In the area she wanted to live $150,000 wouldn’t give her what she wanted for her family.
Her Realtor called me regarding doing an FHA 203 K loan as the bank that did her pre-qualification doesn’t do them and they recommended the Realtor contact me. They have been referring these clients to me for many years.
I spent time with Brenda to discuss her options as she and her Realtor found a bank owned property that was in the area she wanted, but the home needed about $25,000 worth of work. With that amount of renovations the home would work.
The Realtor referred a contractor that looked at the property, but he felt the property was too far away for him, plus he had lots of work. I ended up referring a contractor who viewed the property and put a proposal together. For these loans, the contractor is crucial as there is a bunch of paperwork that is required.
Here is the neat part of this transaction. The appraiser has to come up with an “as is” value and a value after the renovations are completed. The purchase price was $109,000 and the final renovation number was $30, 800. The after renovation value came in at $166,000. What a way to create instant equity.
Buying a home that needs some renovations, might be a great option, no matter the price range goals someone has.
Image courtesy of StuartMiles/frredigitalphotos.net
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