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How can I buy an REO that need some Major repair and some minor repairs?

I am Looking at a nice 4 bed 2.5 bath house in a nice area. however, both bathrooms have had the baths rip out and som holes in the walls. In addition, some windows are cracked and there is some torn screens too. Otherwise the property is in pretty good shape.  Was told by the bank that owns the REO I couldn't get a FHA 203k loan on the property as that was only for minor repairs, like painting. Said the only way I could get it was to pay cash for it and the repairs.  Said the bank was probably pricing the property for a cash investor to buy and flip it for a good profit.
  • November 08 2010 - Aston
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Answers (2)

I agree with the previous answer. and can add this
 The largest 203K loan my clients  have done had over $30,000 in repairs with structural and AC repairs on  a Duplex. Unless the repairs exceed $5,000 I dont see any benefit in the program as it results in a higher interest charges and more expenses. I recomment you contact Mortgage lenders who can give you addresses of 203K loans they have done in the last 12 months. Without that you are not dealing with an expert in this area. Good Luck
Benny Smith 
  • November 09 2010
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Find a good mortgage broker familiar with the 203K loans in your area.

Below is a link to information about the 203K loan.

http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm

I am not a mortgage broker but I have seen property rehabilitated with a 203K. A 203K is a construction loan and a purchase loan bundled together. Consult with the mortgage broker to see what are the possibilities for this one property.
  • November 08 2010
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