Matt Picaro has built a three-unit portfolio on Long Island, New York using FHA 203K loans as his primary financing tool. The 203K program allows borrowers to put down just 3.5% while financing both the purchase and renovation costs into a single mortgage, eliminating the need for separate construction loans or large upfront capital.
Picaro combines house hacking with flipping to accelerate his scaling strategy. He lives in one of his owner-occupied units while renting the others, using rental income to service debt and fund additional acquisitions. The 203K structure fits this model perfectly because it lets him finance renovation work without depleting reserves between deals.
The 3.5% down requirement makes 203K loans particularly attractive for investors operating on tight margins. Picaro avoids tying up significant cash in down payments, preserving liquidity for contingencies and market opportunities. This approach works best in markets like Long Island where property values and rental income can support multiple units on a single investor's balance sheet.
The trade-off is higher mortgage insurance costs and stricter lender requirements compared to conventional financing. FHA loans demand more documentation and longer approval timelines. Properties must meet FHA standards, and contractors face inspection requirements. Picaro's experience suggests these constraints are worth accepting for investors building portfolios on moderate capital.
For other Long Island investors pursuing similar strategies, the 203K path offers a proven playbook. House hacking stabilizes cash flow while equity builds in renovation work. Starting with owner-occupied units reduces lender hesitation. As Picaro demonstrates, stacking multiple units financed this way creates leverage without requiring large sums of investor capital upfront.
The mechanics work but demand discipline. Picaro must manage renovation timelines, tenant relationships, and mortgage obligations simultaneously. One delayed project or vacancy directly impacts his ability to fund the next acquisition. The strategy