We all know that investors can’t buy homes themselves using the FHA 203k … but does that mean they’re left on the sidelines when it comes to applying the power of our favorite renovation loan? Absolutely not! Get the word out to your investor friends that there’s an amazing new opportunity for them to make a great return on distressed properties in distressed condition across America.
The key for investors is recognizing that the 203k becomes a highly desirable option to open the sale of the home to more buyers. So although the FHA prohibits investors from using a 203k themselves for a home purchase, they can introduce buyers to the 203k as a great way for them to buy a property in need of some spit and shine ... or more.
Not long ago, the FHA required a home to be owned for a minimum of 90 days before it could be purchased by anyone using an FHA mortgage. This became a challenge to investors who wanted to quickly "flip" a property, but the good news to many is that this 90-day "anti-flip" rule has been lifted.
Recognizing the very best buys on homes are typically properties in need of some serious repair and renovation, the next challenge for investors is that it takes time and additional investment capital to make these improvements. On top of that, there's always the risk that the colors and styles chosen by the investor may not meet the tastes of prospective buyers. Although making these improvements is intended to make the home desirable to more prospective buyers, it can often backfire and have the opposite effect.
Enter the 203k to the rescue!
Here's the investor strategy I've proposed to thousands of professionals over the last year. Instead of investing additional capital, time and energy in renovation that may not provide a great return -- let's set this home up as the ideal candidate for smart buyers using the power of the 203k. Offer the home as a blank palate. Clean it out, patch up walls and give it a fresh coat of paint in a neutral color. I like to call this the "white box" approach.
Now we have a perfect opportunity for a single buyer, couple or family to create the home of their dreams. Similar to purchasing a newly built home, the buyers can now choose colors and finishes they prefer to make this house more of their own home. The investor earns a fair return since many properties simply must be acquired with cash today. The home owners can still enjoy an excellent value, and if purchased and budgeted properly, even earn some equity in the process as they renovate a home to meet their specific tastes and desires.
And to bring this all together most quickly and easily, investors and home buyers can turn to our REbuildUSA 203k Specialist real estate agents and lenders. They can provide the professional guidance needed at all stages of your project. They'll also leverage the power of the REbuildUSA Project Portal™ to facilitate the renovation planning and bid preparation process.
This is yet another example of how REbuildUSA and our 203k Specialists can deliver solutions that benefit many different folks in many different ways. So if you're someone looking for investment opportunities in today's new world of real estate, let REbuildUSA help you get back in the game.