Today we’d like to talk about a very special topic: renovation loans. These types of loans became popular in the day of short sales and foreclosures when a lot of houses were beaten up and buyers couldn’t afford to come in and spend a lot of money fixing them.
They went away a bit when our market changed, but now they’re back. This means that you should make sure that your buyers and lenders are aware because this could be a great opportunity for someone to get a house that they may not have considered in the past.
Any renovated home that’s listed on our market between $200,000 and $400,000 is selling very quickly. A lot of times, it’s within a few days with multiple offers.
An opportunity exists for homes that need a little work. Those homes are sitting on the market a bit longer, and they’re selling for very affordable prices. If you can get a strategy together with your buyer and lender to look for these kinds of houses, an FHA 203(k) loan is a great opportunity.
With this loan, you can buy a home for $150,000, finance $170,000 to include renovations, and finance these repairs to make the home look how you want.
Not all buyers have the ability to imagine a sub-optimal home transforming into a beautiful home. You’re going to have to go through the exercise of showing them homes that have been renovated already, and show them that this is what their home would look like if we renovated it too.
If you have any questions for us about renovation loans or anything else related to the real estate business, don’t hesitate to reach out and give us a call or send us an email. We look forward to speaking with you soon.