Sunday, November 23, 2014

Renovation Loans - Some Get It and Some Never Will

I've been doing renovation loan and construction consulting since 1994 and found it to be a very rewarding experience and we move a whole lot of homes that wouldn't have been moved in any other way.

Daily I hear Realtors say they have never done one after thirty years in the business, others have been told by someone years ago that you should stay away from renovation projects. I love this one because in some cases they told you that so you wouldn't poach in their territory. Beware of those who might tell you to stay away from the FHA 203k and be sure it isn't because the want it all to themselves.

1) You have a home that your buyer wants that is dated, very dated. There appears to be no updating but gee, it is a nice home otherwise. In my opinion you would be doing a disservice to them not to make them aware of the potential for a renovation loan and put them into that home fully restored or updated, but that is my opinion.

2) The work all happens after it closes escrow so it doesn't affect the Realtor or slow up the process of closing.

3) The buyer gets a 10% push on the appraised value and it is based on the work being completed.

4) You can actually sell them the home, close the loan and then suggest they get a 203k refinance. The kicker here is that if they close the 203k loan within six months of buying the home they get to count all of that money they put down as money they have into the project for the purposes of the new loan making it possible to get the construction money with NO MORE MONEY OUT OF THEIR POCKET.

5) The 203k is just another tool in your tool box that you can very effectively use now and again, it doesn't have or need to be used on every home but it can sell a home for you that otherwise might be skipped over.

If your office needs some training on the programs that are available please don't hesitate to call our team, we are happy to provide you with all the info you need to know to make you proficient and confident that you can get these closed.

Donna in SC closed her first full 203k in 21 days many years ago and continues to do so. Why can Donna do this and others tell you it will take sixty days? Simply because she did her first one with a seasoned team and realized early in the game that it is the Team that makes the difference. Choose your Team wisely and we hope it will be our Team.