Real Deal REInvestor Network

Disclaimer: I am not an expert nor a mortgage broker or loan originator. Do your due diligence. :)
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This is something I have learned in networking with other investors here in Tampa bay. 

FHA 203KS loan is the streamlined version of 203K FHA loan. And 53rd Bank have a great program wherein they brought Lowes and Home Depot in the picture. What do I mean by that? Well for a first time home buyer they now have the priviledge to work with their favorite and trusted brand names Lowes and Home Depot in doing their rehab work for them. Home Depot and Lowes works with 53rd bank in order to get the rehab done up to $35,000 worth of repairs as long as it is none-structural (no additional or removal of rooms), no fencing, no landscaping and the likes... again I am not an expert nor a mortgage broker or loan originator, please perform your own due diligence. 

What happens is, this gives the qualified buyer the ability to renovate to their hearts content up to $30,000-$35,000  worth of repairs. New kitchen, new bathrooms, new a/c, new roof, new flooring, new cabinets... etc. etc.... and with the assistance of Home Depot or Lowes where they will estimate, guide and will do the renovations for the buyer. Buyer would feel more comfortable doing their own renovations with their own taste.

This should address the dilema of not having the money to renovate for the first time home buyer. 

Total cost of acquisition and renovation should be close enough to the after repair value or future value of property after fix-up.

Ok, so what does that do to my wholesaling business? Want to profit up to 20% mark-up? If you bought a property and will sell it 90 days or less to these type of buyers, FHA will allow up to 20% mark-up profit. If more than 90 days and with a little improvement on the property, FHA will allow a 40% profit by wholesaling the property to this first time home buyers.

These type of buyers are most often outbid by cash buyers and are not able to get a property under contract because they go after the properties in which 25++ investors are eyeing upon too. Want less headache without the renovations? Wholesale to these type pre-approved buyers. Where do you find them? Talk to your local Mortgage Loan Originator. They've got a pile of them. Ask them where and what these buyers are looking for?
Now make offers on these properties that these  buyers are looking for and sell it to them. 

Smart for Fifth Third bank to bring in Home Depot and Lowes into their program. :)

Hope you picked up some great ideas here.... happy wholesaling! :D

Here's a resource from Director Jo Amick: (Thanks Jo!:)  http://www.brianbeattyonline.com/xsites/Mortgage/258/content/uploadedFiles/203Ks%20Quick%20Reference%20Guide.pdf

And here are some resources from google library:
 http://www.dallasfhaloans.com/493/fha-203k-or-203ks-may-be-your-answer-when-buying-a-home-that-needs-work/

http://www.loansquawk.com/blog/fha/fha-203k-remodel-loan-rehab-loan-fha-203ks%E2%80%A6what-read-on%E2%80%A6/

http://pulsefunding.com/loans/rehabilitation-loan/ 

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Disclaimer: I am not an expert nor a mortgage broker or loan originator. Do your due diligence. :)