I'm looking for advice on buying my first home, additionally, I'm more looking for info on home improvement loans or a 203k mortgage, I've heard the 203 is virtually impossible to get these days. I'll most likely purchase this home via FHA, I do have some cash (about 12k) set aside. I've been told drastically different things on the likelihood of borrowing additional money to put in to this house before even moving in. I'm thinking the renovation will cost about 30k but plan to try to borrow 40.

Here's a link to the home:https://www.realtor.com/realestateandhomes-detail/204-S-Mulberry-St_Luling_TX_78648_M81506-32631


So I have two uncles who are both housing contractors, another uncle whose a master plumber, and my father in law is a master electrician. So labor and good people to do the work won't be an issue.

I think based on who I've spoken to whose knowledgeable that once I get the inspections done, I should be able to get this house for 155 to 165.

Just want to see what any of you recommended on borrowing that much and my chances of being approved for an additional loan when not having equity. If it helps as far as financial matters, I'm on pace to make about 140 a year (been in my job two months) the wife has a state job and makes about 35.

Talking to my realtor whose representing me she believes asking price after all of the planned renovation would 220 to 250 depending how far we go, she believes with painting and flooring and simple stuff we could get 215 as is. So there will certainly be money to made if we go in more on the renovation which we want to do. We plan to live here three years then sell it and take our equity and profits to build our dream home. We rent now and really want our money to be going toward something.

Curious, what is the brick building next door? Is the driveway to the left? Is there a garage or carport?

The brick building is a hotel, there is no garage or carport. That gravel road between the home and hotel is for the alley way.

Quote:

---

The brick building is a hotel, there is no garage or carport. That gravel road between the home and hotel is for the alley way.

---

Quote:

---

Talking to my realtor whose representing me she believes asking price after all of the planned renovation would 220 to 250 depending how far we go, she believes with painting and flooring and simple stuff we could get 215 as is.

---

Granted, I do not know the Luling market at all, but will a well renovated house next to a hotel with no garage really get you what the realtor says? The house looks cool & no doubt you and your family will make it really nice, but it seems to me that these things would hurt you in re-sale.

Just paint & flooring would give you that much of an increase? Wow, if true.

schwack schwack said:

---

Quote:

---

The brick building is a hotel, there is no garage or carport. That gravel road between the home and hotel is for the alley way.

---

Quote:

---

Talking to my realtor whose representing me she believes asking price after all of the planned renovation would 220 to 250 depending how far we go, she believes with painting and flooring and simple stuff we could get 215 as is.

---

Granted, I do not know the Luling market at all, but will a well renovated house next to a hotel with no garage really get you what the realtor says? The house looks cool & no doubt you and your family will make it really nice, but it seems to me that these things would hurt you in re-sale.

Just paint & flooring would give you that much of an increase? Wow, if true.

---

Let me rephrase my statement, she said minimal but that minimal includes updating bathrooms and kitchen as well, but doing minimal. As in using existing cabinets in the kitchen, but painting them, changing hardware and adding backsplash and counter tops. As far as the hotel goes, I don't think it's a non starter, that street that house is on is maybe 200 yards from the Schools, it's a great neighborhood, I grew up on the same street. I'm not thrilled about the hotel being across the alley, but it's not a meth den, there's actually a lot of rail road employees and stuff that I see staying there a lot. As far as the garage, the backyard is quite large and we have already kind of agreed that we would most likely have a slab poured and add a carport that's accessible from the alley. My dad and me both have a lot of steel fabrication experience (username checks out) so building a carport wouldn't me anything but the materials and the slab.

Also, the Luling housing market is higher than its ever been right now. The realtor in question is a life long family friend who is constantly moving properties for top dollar by Luling standards, and happens to be my backyard neighbor at my rent house. We know each other well.

Then it sounds like a no-brainer! Good luck & post pics here when you sell it!

schwack schwack said:

---

Then it sounds like a no-brainer! Good luck & post pics here when you sell it!

---

I was more asking about how home improvement loans work? Especially going FHA, I'll have no equity.

I think you are low on your renovation numbers unless you intend to do the majority of the labor yourself without pay. How old is the hvac unit ? Septic or city sewer? Galvanized or copper plumbing ? Kitchen and bath remodels add up fast. What are you doing for flooring ? On 2172 sq ft even with cheaper tile and required thinset your are already at $6,000 in materials alone without any labor. I would seriously sit down and make a spreadsheet with all cost and plan for unexpected issues once you tear it open.

I'll check to see if I have that loan tomorrow. It's a 203k. You have some upfront costs since you need a complete plan by licensed contractors. Here is a quick view of the loan

https://www.moneycrashers.com/fha-203k-mortgage-loan-requirements/

JP76 said:

---

I think you are low on your renovation numbers unless you intend to do the majority of the labor yourself without pay. How old is the hvac unit ? Septic or city sewer? Galvanized or copper plumbing ? Kitchen and bath remodels add up fast. What are you doing for flooring ? On 2172 sq ft even with cheaper tile and required thinset your are already at $6,000 in materials alone without any labor. I would seriously sit down and make a spreadsheet with all cost and plan for unexpected issues once you tear it open.

---

City sewer, has dual hvac units, but one is less than a year old and the primary for the house. As far as flooring and with us keeping budget in mind we will most likely do a click and lock and will install ourselves. We plan to go the sweat equity route as much as we can, luckily I know how to lay tile and backsplash, so that will come in handy in the kitchen and bathrooms. We're not necessarily trying to get everything done with that 40k but as much as possible. I make a decent salary and have hardly no credit debt, as well as my wife. So we will still be putting back a good amount of our own money each month we can roll into this. We're pretty much planning to devote the 40k to exclusively the inside. The outside will be out of pocket. Which will most likely be ripping off all of the old paneling and going with a board and batten, paint and eventually a new shingle roof. We have our own new matching appliances that will be making the move with us so we save money there as well. In the kitchen it'll be basically adding backsplash, painting the cabinets and counter tops. We're really wanting to do as much research as possible and watching price point more than wishlist.

My uncle is actually going to walk the house with us on Tuesday to give us run down on expenses for our plans.

250 seems really high for luling Texas next to a motel, but that is a completely uneducated gut opinion. Sounds like you've done some homework, though. Good luck!

expresswrittenconsent said:

---

250 seems really high for luling Texas next to a motel, but that is a completely uneducated gut opinion. Sounds like you've done some homework, though. Good luck!

---

Well if we get the house for around 160 like we hope and put 40 into it, we will be at 200, add in that we plan to live there around three years paying it down, I'd say even if we sell it for 225 we're still in a pretty good spot to turn a profit even with any additional of our own money we put into it.

If we were willing to rent another year or two we could probably roll into a ready made home and put 20 or 30k down. But I've been told renting is terrible and we should get into something as quick as possible. Plus, my wife wants another kid ASAP and we've maxed out on space in our rent home.

I'd appreciate any honest insight. I know I don't know **** just feel like I've somewhat educated myself on what I can. Be brutal, doesn't bother me.

why on earth would you want to demo those beautiful teal tiles in the kitchen?

You might consider the Fannie Mae home style program as well. The 203k is a very good program, but the homestyle program is basically the same program but conventional loan instead of FHA. This will allow you to go up to 95% loan to value based on the improved value vs 96.50% for the 203k, but your mortgage insurance assuming would be cheaper on the homestyle.

Based on your numbers above using 155k purchase price and 40k renovations, you could borrow 185,250 which is 9750 of your cash being 5% down. So, yes these loans absolutely exist, but they do take a bit longer and do have more moving parts but great products for this situation.

A link from our home improvement/rehab website for more info: https://hurstlending.com/home-improvement-loans/

sts7049 said:

---

why on earth would you want to demo those beautiful teal tiles in the kitchen?

---

I'm gonna redo that stuff with Saltillo tile on the floor and counter tops. I like uniform.

OP you can build assets in primary residences. Mostly sweat equity but doable. You make money on the purchase not the sale. Scrub your numbers. Twice.

For example. Have you factored in closing costs on the buy and the sale?

Buy figure 3% for now. 2% minimum
Sale figure 8% top end. You can shave some of that not paying 6% full retail realtor costs.

So that 11% off the top full boat.

Quote:

---

So I have two uncles who are both housing contractors, another uncle whose a master plumber, and my father in law is a master electrician. So labor and good people to do the work won't be an issue.

---

Can they quote you before you offer? There's just a lot of stuff there...kitchen cabinets need re-facing, roof damage, fan/lighting kits, oven/stove need replacing. Then there's the unseen stuff like water heaters, AC, piping, foundation... Nice trees, but the place needs some landscaping.

I would definitely find the best inspector around, and not whoever the realtor shoves at you.

Disclaimer: I've more or less completely redone 2000 ft^2 twice, in the same house, in the last 2 years. Once I coordinated everything, and the second time used a GC.

AgFab - just sent you a pm.

Renovation loans are a great option.

With Reno Loans you can roll the remodel/repair costs in to the mortgage. This allows you to not have to pay closing costs/ down payment and then come up with cash for renovation.

You can remodel kitchen, bath, add a pool, add a master suite, etc.

If you are a first time home buyer, we can do as little as 3% down on certain reno loans products.

With FHA 203k you have to pay for a HUD consultant. FHA is an option but I would look at other products first.

Reno Loans require more work on the lenders side so you want to make sure you have one that is well versed in getting them from start to finish.

Our processor Blair '09 recieved company wide aclaim for her expertise on renovation loans.

You can find some basic information on the products we have at https://12homeloans.com/renovation/

We also have products for non-primary residences.

94chem said:

---

Quote:

---

So I have two uncles who are both housing contractors, another uncle whose a master plumber, and my father in law is a master electrician. So labor and good people to do the work won't be an issue.

---

Can they quote you before you offer? There's just a lot of stuff there...kitchen cabinets need re-facing, roof damage, fan/lighting kits, oven/stove need replacing. Then there's the unseen stuff like water heaters, AC, piping, foundation... Nice trees, but the place needs some landscaping.

I would definitely find the best inspector around, and not whoever the realtor shoves at you.

---

We're walking the hope tomorrow with the realtor, after we put our eyes on stuff we're going to go home come up with a thorough list of the renovations we plan to do and walk the home again with my uncle and get him to give us a firm price. We're going to spend the extra money for full inspections of all aspects of the house a standard inspection may overlook. I'm not in a hurry, I want to a smart investment.

Figured that would be the case. Some realtors act like they've never heard of bringing a GC along for a home tour.

I'm from Gonzales, so I'm familiar with the area. Houses in the $250-300 range have a tendency to sit for awhile because the median incomes in these cities are awful. Also, land is still somewhat "cheap" in the area and building a new home on a few acres out there wouldn't be too far off from what you might be asking once you finish your remodel. People aren't exactly jumping at the opportunity to move to Luling. The school system there and in the surrounding areas are absolute *****

I'm interested to hear how far folks think the planned 40k will go to getting this house to a nice condition.

Not sure about prices in Luling, but in Houston, you could probably take care of the flooring, do a decent remodel for the kitchen and maybe have enough left for the bathrooms. I doubt you would be able to take care of everything that needs to be done with that house.

Shiner Bock said:

---

I'm interested to hear how far folks think the planned 40k will go to getting this house to a nice condition.

---

It doesn't seem like buying at 155 and 40k loan for Reno would be better than what you could get new or nearly new and move in ready for the same-ish 200k.

I did a renovation in austin proper in the last year and ripping out old flooring, installing new subflooring and floors, complete master bath reno, new walled/built master closet, partial guest bath reno, and complete kitchen reno was about 55k, so 40k might not be too far off with lots of free help.

IrishTxAggie said:

---

I'm from Gonzales, so I'm familiar with the area. Houses in the $250-300 range have a tendency to sit for awhile because the median incomes in these cities are awful. Also, land is still somewhat "cheap" in the area and building a new home on a few acres out there wouldn't be too far off from what you might be asking once you finish your remodel. People aren't exactly jumping at the opportunity to move to Luling. The school system there and in the surrounding areas are absolute *****

---

Haha I know this. My kid goes to private school now, and we want to transition over to Geronimo ISD but it's stupid expensive. So we thought we'd live here two more years, sell the house and roll the profits into the type of home we want over there.

AggieFabricator said:

---

IrishTxAggie said:

---

I'm from Gonzales, so I'm familiar with the area. Houses in the $250-300 range have a tendency to sit for awhile because the median incomes in these cities are awful. Also, land is still somewhat "cheap" in the area and building a new home on a few acres out there wouldn't be too far off from what you might be asking once you finish your remodel. People aren't exactly jumping at the opportunity to move to Luling. The school system there and in the surrounding areas are absolute *****

---

Haha I know this. My kid goes to private school now, and we want to transition over to Geronimo ISD but it's stupid expensive. So we thought we'd live here two more years, sell the house and roll the profits into the type of home we want over there.

---

Do you send them to Shiner Catholic?

IrishTxAggie said:

---

AggieFabricator said:

---

IrishTxAggie said:

---

I'm from Gonzales, so I'm familiar with the area. Houses in the $250-300 range have a tendency to sit for awhile because the median incomes in these cities are awful. Also, land is still somewhat "cheap" in the area and building a new home on a few acres out there wouldn't be too far off from what you might be asking once you finish your remodel. People aren't exactly jumping at the opportunity to move to Luling. The school system there and in the surrounding areas are absolute *****

---

Haha I know this. My kid goes to private school now, and we want to transition over to Geronimo ISD but it's stupid expensive. So we thought we'd live here two more years, sell the house and roll the profits into the type of home we want over there.

---

Do you send them to Shiner Catholic?

---

Hill Country Christian in San Marcos.