Matt Porcaro

We're putting about two, three, two, three hundred into it. But it's going to be worth like one three when we're done. So we're building almost a half a million in equity.

We're putting about two, three, two, three hundred into it. But it's going to be worth like one three when we're done. So we're building almost a half a million in equity.

Great question, great question. FHA, the 203k FHA is a little more strict. They're not really that strict. really just has to be integral to the house itself. So it needs to be, you know, you could renovate, you could get nice finishes, you could get like... So I could have a pool and I could redo a pool. You could redo a pool. Add the pool.

Great question, great question. FHA, the 203k FHA is a little more strict. They're not really that strict. really just has to be integral to the house itself. So it needs to be, you know, you could renovate, you could get nice finishes, you could get like... So I could have a pool and I could redo a pool. You could redo a pool. Add the pool.

Now, the homestyle loan, which is Fannie Mae's product, which is the conventional product, is a lot more flexible. You can build a pool, a pool house, a basketball court, whatever. It kind of just gives you carte blanche. Now, they will... So obviously, there's the loan limit. But what they really look at for your average buyer is they look at what the ARV of the property is going to be.

Now, the homestyle loan, which is Fannie Mae's product, which is the conventional product, is a lot more flexible. You can build a pool, a pool house, a basketball court, whatever. It kind of just gives you carte blanche. Now, they will... So obviously, there's the loan limit. But what they really look at for your average buyer is they look at what the ARV of the property is going to be.

And they give you up to 100% of that on the home style. On the FHA 203k, this is pretty wild. They'll finance 110% of the ARV. So they'll actually let you over leverage it by 10%. Obviously not something I am a big fan of as a real estate investor.

And they give you up to 100% of that on the home style. On the FHA 203k, this is pretty wild. They'll finance 110% of the ARV. So they'll actually let you over leverage it by 10%. Obviously not something I am a big fan of as a real estate investor.

Yeah, you do, but I think the reason that FHA probably does it is because, again, they know that you're renovating it for your own home, and they probably, again, it's the owner occupancy, so they're assuming you're going to be there for a little while, so if you're willing to over-leverage it. If you're there in 10 years, the appreciation is going to make up for it and you'll be fine.

Yeah, you do, but I think the reason that FHA probably does it is because, again, they know that you're renovating it for your own home, and they probably, again, it's the owner occupancy, so they're assuming you're going to be there for a little while, so if you're willing to over-leverage it. If you're there in 10 years, the appreciation is going to make up for it and you'll be fine.

We can't trip and fall into a house anymore like we could, like society could 60 years ago, right? Or in 2005. Yeah, right.

We can't trip and fall into a house anymore like we could, like society could 60 years ago, right? Or in 2005. Yeah, right.

And to that point, Ray, like, you talk about, like, the assets versus liabilities, and there's that, like, common thing that Robert Kiyosaki said is, like, you know, your own home is a liability. It's not an asset. It's other homes that become assets. Your rental properties are assets.

And to that point, Ray, like, you talk about, like, the assets versus liabilities, and there's that, like, common thing that Robert Kiyosaki said is, like, you know, your own home is a liability. It's not an asset. It's other homes that become assets. Your rental properties are assets.

But your own home is a liability because typically for most people, their own home is they go in and they spend a ton of money to, you know, maintain it and landscape it and repair it and, like, Over the course of 30 years, it's not a true investment. You're not making money on it. Now, like appreciation will go up.

But your own home is a liability because typically for most people, their own home is they go in and they spend a ton of money to, you know, maintain it and landscape it and repair it and, like, Over the course of 30 years, it's not a true investment. You're not making money on it. Now, like appreciation will go up.

But again, I think his point is when you add up all the expenses and you add up like the interest that you pay over it on 30 years, you ever look at it. You know what? Obviously, a truth in lending statement is right. So when you when you take out a 30 year mortgage on a five hundred thousand dollar property over the course of 30 years, you're actually paying over double. of that 500 grand.

But again, I think his point is when you add up all the expenses and you add up like the interest that you pay over it on 30 years, you ever look at it. You know what? Obviously, a truth in lending statement is right. So when you when you take out a 30 year mortgage on a five hundred thousand dollar property over the course of 30 years, you're actually paying over double. of that 500 grand.

So in what universe is that a good investment? Right. You paid a million dollars to make 500,000. Right. Right. Now, of course it'll appreciate a little bit, but okay, maybe you break even with this method with building, you know, again, it's, it's value add investing, right? It's the BRRRR strategy.

So in what universe is that a good investment? Right. You paid a million dollars to make 500,000. Right. Right. Now, of course it'll appreciate a little bit, but okay, maybe you break even with this method with building, you know, again, it's, it's value add investing, right? It's the BRRRR strategy.