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[quote=Anonymous][quote=Anonymous]If you have the capital and patience, it's better to buy a run-down place and find a reputable contractor to do a gut remodel (or tear down and find a reputable builder to build new). But it's easier to get a loan for an already rehabbed place, so . . .  Slightly off topic, but I've heard that the 203 loans (where the remodel cost is built into your mortgage loan) are hard to get and hard to administer (lots of paperwork to get repairs paid for). Anyone have experience with them?[/quote]

I'm the PP who just posted.  We bought a year or so ago.  When we first started looking, however, we looked at foreclosures and we looked into renovation loans.  We got a lot of confused and conflicting information about them.  One thing is for certain, not all lenders do them.  So that narrows the pool greatly.  The interest rates are slightly higher.

And you can't do any of the work yourself.

We gave up, mainly because we really had trouble finding foreclosures priced low enough to make it all work.

I did have a relative purchase a house with a renovation loan.  It wasn't a foreclosure, more like an estate sale situation.  But they had trouble.  The house wouldn't appraise for the amount they needed to get the renovations they wanted, so they had to drastically scale down their renovations.  It was tense.  I suppose it all worked out in the end, but you have to be prepared for possible road bumps or perhaps not getting all of the things you want done.  Basically, the appraisal takes into account the house's value plus the added value of your proposed renovations.  It can be tricky.[/quote]

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