15:00 · what I do
Buy it rough and fix it
Purchase-rehab financing lends against what the house will be worth when the work is finished, not what it is worth on the day you walk through it. It is slower, more paperwork, and occasionally the only way a good house gets bought at all.
Where this one goes wrong
Three things worth knowing before you are under contract, rather than after.
The contractor is part of the file
On most rehab programs the contractor is approved alongside you and gets paid in inspected draws. Choosing one who has never done a draw schedule is the single most common reason these files run long.
Contingency is not optional
Programs require a contingency reserve on top of the bid — typically 10–20%. Plan the project as though you will use it, and treat it as a bonus if you do not.
The appraisal is subject-to
The appraiser values the finished house from your plans. If the scope changes materially mid-project, the value has to be revisited, and that is a real delay.
Illustrative throughout. Percentages and thresholds named on this page describe how these programs generally work, not a commitment about your file. Program rules change, lenders add their own overlays, and nothing here is an offer to lend or a rate quote.
Also
Other files I take
- 10
The three-decker, and everything like it
Buying a two-, three- or four-unit and living in one of them is the most Rhode Island way there is to own a house.
Read more - 11
Self-employed, 1099 and seasonal income
If you run something, an underwriter is going to read your tax returns differently from the way your accountant wrote them.
Read more
Reach me directly
Talk about a renovation file
Whatever stage you are at. If it is a house you have not seen yet, that is the useful time.
- Fastest(401) 555-0128Call or text. It rings on one phone.
- Writtennadia@botelho-mortgage.exampleReplies weekdays, usually within a couple of hours.
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