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203K Rehab… A Diamond in the Rough!

Date:September 10, 2009 | Author:Andrew Adams | Category:Costs and Fees

Well….I figured I would give YouTube a whirl… I finally got around to putting some before and after photos together from a K loan I closed on 12/28/2008.

Purchase Price $192,000

Cost of Renovation $32,642

After Improved Value $260,000

Equity After Renovations $35,000+…..$33,000 can make a HUGE Difference!
I sent my clients a link to my blog when I posted it….This was her response:
“Wow, so cool that you used my pics A month ago another lady was driving by and said she was an appraiser using my house as a comp. She came in to see the improvements and then when we queried her on what she thought we’d be able to get for this house today she hemmed and hawed, then said, prices have dropped since we bought so we’d probably lose money…. because she can see we’ve put in a ton of money (not true, but that’s what she thought). Then she said in this market with the economy so bad, I’d be able to get $350,000
That made me very happy ” -Owner of the home in the video

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Responses (2)

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Tom Maison 11:51 AM - Sep 11,2009

Nice work – that’s a pretty quick close! Was that through Freedom Mortgage?
Andrew Adams 12:02 PM - Sep 11,2009

We are a correspondent lender so we underwrite and close the loans. The slow down is on setting up the initial draw which is running close to month.

It is a very big advantage my YTD turn time from application to close on K loans is running 36 days. I am closing these quicker than non K loans! Go Figure!
Diet 3:36 AM - Sep 12,2009

That’s a great deal
Brian Brady 10:54 AM - Sep 12,2009

I have been hesitant to market these loans because of the perceived headaches associated with them. It sounds like you have them figured out.

I think that these will be the preferred loans for REOs, moving forward. Southern California has lots of REOs so I best learn how to close these. I think a dos and don’ts article, aimed at borrowers about 203K loans, would help both consumers and industry folk alike.

My hat is off to you, Sir. These are the loans that will turn this economy around and too few of us are taking the time to learn them
Andrew Adams 11:02 AM - Sep 12,2009

Brian,

I will make a deal with you. Help me to figure out how to blog better and easier and I will help you learn to do K loans.

I was thinking about a video series on how a k loan works from application to close, geared towards realtors. Realtors need to embrace these loans to make a real impact!
Finance 12:27 PM - Sep 16,2009

That’s really awesome deal, great
Brian Brady 7:59 PM - Sep 17,2009

“I was thinking about a video series on how a k loan works from application to close, geared towards realtors.”

Oh, please do. Buy a Flip Video ($100) and document the process, at a house, securing bids, and reviewing paperwork.

“Help me to figure out how to blog better and easier and I will help you learn to do K loans.”

Deal. A few webinars for each other?
Cheryl Hale 4:30 PM - Sep 18,2009

Nice job Andrew,

The house looks amazing…definitely looks like they spent more that 33K to rehab!

I will be following your posts too, to learn more about these loans. I agree with Brians comment that these are going to be the preferred loans for REO properties.