Creative Real Estate Deals: How to Fund, Renovate, and Build Wealth, the 203k Way with Matthew Porcaro
For aspiring real estate investors, finding the right deal and the right funding is often the biggest barrier. Many are stuck chasing retail sellers, negotiating steep down payments with banks, or trying to compete with overcrowded “no money down” strategies that rarely deliver. However, Matthew Porcaro offers an alternative path that’s quietly transforming the way new investors break into the market and generate both equity and cash flow from their very first deal.
Matthew’s journey started with frustration, spending four years attempting traditional investment methods, only to hit roadblocks at every turn. He eventually discovered a government-backed renovation loan – the FHA 203k – which became the game changer for him and many he has since coached.
The FHA 203k loan is a powerful tool designed to help homebuyers not only purchase a property with a low down payment but also fund the necessary renovations to increase its value. Unlike conventional mortgages, this program allows buyers to put down as little as 3.5%, making it more attainable for those without deep pockets. Beyond the purchase price, the loan also covers renovation costs, closing costs, and even the first year of mortgage payments, alleviating the financial strain while the property is being transformed.
Matthew’s first experience with the 203k loan involved purchasing a distressed two-family property. With just $9,500 out of pocket, he was able to renovate both units using the bank’s money. The key strategy here was house hacking – living in one unit while renting out the other. The rental income from his tenant nearly offset his entire mortgage payment, resulting in positive cash flow each month. After the renovations and eight months of work, the property’s value soared, securing over $130,000 in equity for Matthew. This equity became the springboard for future investments, proof that a smart approach to renovation funding can accelerate a real estate portfolio quickly.
What makes the 203k loan even more attractive is its flexibility. Investors can buy up to four-unit properties using this method, applying the same low down payment. In states facing housing shortages, recent adaptations now allow buyers to convert single-family homes to include accessory units (like mother-in-law suites) and count that future rental income towards their loan approval. This creative approach expands opportunities, even for those in expensive markets like New York.
For many, the confidence to pursue a deal comes from mindset. Matthew’s upbringing was blue-collar, with little exposure to investing or creative financing. Breaking through early limiting beliefs about money was an ongoing process, but it allowed him to realize that opportunity isn’t just reserved for the wealthy or experienced. He built credibility for future deals through his success on the first one and was then able to raise over $500,000 in private money, mainly by simply sharing his story and offering others the chance to participate.
A crucial aspect for those considering the 203k way is the importance of working with specialists. Not all lenders have experience with renovation loans, so partnering with experts who understand the nuances is essential. The process involves a consultant who helps outline the scope of work and connects buyers with contractors and appraisers to ensure the highest after-repair value is achieved – sometimes allowing you to borrow up to 110% of the finished value.
Matthew emphasizes careful stewardship of borrowed funds and treating every transaction as a win-win. By focusing on the right structure, leveraging government programs, and maintaining a supportive mindset, even first-time investors can create massive equity and recurring cash flow, setting themselves up for long-term success.
The 203k way is not just about acquiring a property. It’s about launching a strategy that transforms your financial trajectory. For those tired of hitting walls with traditional financing, Matthew Porcaro’s system offers a proven pathway: start small, leverage creative funding, build equity and cash flow fast, and expand your portfolio with experience and confidence.
If you want more insights or guidance on using the 203k way to break through your investment barriers, connect with Matthew through his site or Instagram. The opportunity to build wealth and create freedom is within reach; with the right approach, your first deal can be the one that changes everything.
10 Discussion Questions from this Episode:
- Jay Conner and Matthew Porcaro both talked about how mindset shifts were crucial to their success in raising private money. What specific mindset barriers did they each face, and how did they overcome them?
- How did Matthew Porcaro initially approach his friends and family to raise over $500,000 in private money, and what scripts or techniques did he find most effective?
- The “203k way” played a pivotal role in Matthew Porcaro’s entry into real estate investing. What are the main advantages and unique features of a 203k loan compared to traditional financing or private/hard money?
- Why do you think, based on the conversation, so few lenders and real estate agents mention or promote the 203k loan product for new or aspiring investors?
- Matthew Porcaro and Jay Conner both highlighted the importance of providing win-win scenarios for private lenders. How does this approach build lasting relationships in real estate investing?
- The concept of “house hacking” was discussed as part of the 203k strategy. In your opinion, how effective is house hacking as a way to build wealth or begin investing, especially in high-cost markets?
- Spirituality and a sense of purpose came up during the discussion. How has Matthew Porcaro’s renewed focus on faith influenced his business approach or his desire to help others?
- The FHA 203k loan allows you to borrow up to 110% of the after-repair value (ARV), which is unusual. What are the risks and benefits of this policy for a first-time investor?
- According to Matthew Porcaro, most people can find sufficient funding by simply reaching out to their network. Why do so many new investors underestimate their ability to raise private money, and how can they get past that mental block?
- If you were considering your first real estate deal, what factors from Matthew Porcaro’s story or strategies would you want to replicate, and what, if anything, would give you pause?
Fun facts that were revealed in the episode:
- Matthew Porcaro kicked off his real estate investing journey by purchasing a two-family property with just $9,500 down, using a little-known government-backed renovation loan called the 203k. In less than eight months, he generated $160,000 in equity and positive cash flow.
- The FHA 203k loan allows a buyer to purchase and renovate up to a four-unit property with only a 3.5% down payment. Even better, the loan not only covers the purchase and renovation, but can also include closing costs and up to the first 12 months’ mortgage payments in the loan amount.
- According to Matthew Porcaro, the 203k loan’s after-repaired value appraisal lets you borrow up to 110% of the future value of the renovated home, providing extra leverage that most real estate investors aren’t aware of.
Timestamps:
00:00 Smart Leverage with Matthew Porcaro
04:01 Overcoming Imposter Syndrome in Investing
06:47 Building Trust and Team Success
10:14 Raising Private Money Through Help
14:43 Programming Money & The Rat Race
18:45 Transformative Power of Private Money
21:55 Awakening to Faith’s Depth
24:38 When Is Enough Enough?
27:35 FHA 203k Renovation Loan
36:52 Connect with Matthew Porcaro:
33:01 Loan Unlocks Home Renovation
35:23 Hidden Duplex Housing Opportunity
37:57 Finding Purpose Through Action
40:33 Specialist vs. Generalist Expertise
45:17 Home Renovation Scope Explained
47:55 Leverage Real Estate for Savings
52:17 DIY Isn’t Always Worth It
55:27 Transforming Lives Through Real Estate
57:20 The 203K Funding Strategy
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