So we have a REO Fannie Mae under contract for $45k and flipping for $54k. Buyer is under contract and we are doing a double close. Should close in less than 30 days! $9k profit - I find property and partner finds buyer, 2 hours of work!
Okay heres the info for FM REO:
I spoke with the REO agent and she gave me deep insight on Fannie Mae's requirements. She mentioned that you can't resell property after 90 days, unless you stay within a 120% resell range.
For Example:
Purchase REO at $40k x 120% = $48,000 = $8k profit!
Anything over 120% you hold for 90 days.
Now go out, make more money and let 'em rip on the Fannie Mae REO's...hope this helps! :mrgreen:
HI Scott, I did put in a request for them to remove the deed restriction. When I spoke with the agent, she mentioned that they havent been to helpful with that with other investors putting in that request.
I will see what happens with that request. If it goes through, then I know the next ones with her or anyone else will be easier to deal with. If not, I know how to play the game with them!
I will keep you posted as to what happens... :wink:
We havent closed yet. Still waiting on the approval of the contract. I know it will go through as there are no other contracts on it, plus I told the agent she can take the full commission on the deal. She became my best friend after I mentioned that to her!
I will keep you posted on any headaches that come along with the way with this, but I am not expecting any. Seems like a clean break. Not sure if this applies to HUD properties, I dont deal with those...
Have you actually closed a transaction with this ammendment accepted? The reason I ask is that I deal with REO properties and bnaks are "funny" about anything out of the ordinary. Plus it makes my offer that much weaker asking for things. If it is a simple thing to get approved, I am all ears, but am afarid that it could complicate the deal and the price I want.
Your thoughts?
Edited: 06/26/2010 at 09:22AM
Will Barnard, Barnard Enterprises, Inc. E-Mail: info@barnardenterprises.com Website:http://www.barnardenterprises.com info@barnardenterprises.com
We never ask for this upfront when we submit our offers (we like to go in with no contingencies at all when possible). Instead, we do it during the due diligence period (if there is one), or a few days before the closing. Of course, if there's no due diligence period, we have very little leverage in terms of asking the bank for anything, but we've actually been successful at this a few times.
Twice, the bank has waived the seasoning without any questions asked. And once, they originally said no, but then agreed to it after they slipped the closing a couple times due to title issues.
We've had two times where they've flat-out refused (though like I said above, on one of them they eventually agreed), and when that happens, we just accept it...we go into all FNMA deals expecting that we may have to hold for 90 days for this reason, so generally they're really good deals to be begin with.
It's probably also helped that we're on pretty good terms with most of the REO listing agents we work with. Whenever a transactions goes smoothly, we'll kick back $500 from our commission to the listing agent, so they will do their best to help us negotiate things like this.
J Scott- I'm not sure I saw an actual answer to Wills' question. Have you actually CLOSED one of these with the waiver done in advance? Give us some stats on that transaction if you were able to do it. Thanks for the info. Rich.
I've closed on every transaction I mentioned above:
"Twice, the bank has waived the seasoning without any questions asked. And once, they originally said no, but then agreed to it after they slipped the closing a couple times due to title issues.
We've had two times where they've flat-out refused (though like I said above, on one of them they eventually agreed), and when that happens, we just accept it...we go into all FNMA deals expecting that we may have to hold for 90 days for this reason, so generally they're really good deals to be begin with."
So, the stats are:
- 4 times this year I've purchased a FNMA REO
- 4 times I've requested the title seasoning be removed
- 2 times they agreed (once was during a due diligence period, and once was just a few days before closing)
- 2 times they refused
- 1 of the 2 times they refused, they ultimately ended up relenting because they pushed back the closing a couple times, and I asked for this in return
Btw, all these transactions have been very recent. And, the 2 times they accepted without argument was with the same REO listing agent, with whom we have a very good relationship (we've bought 5 properties from her this year and give her a $500 bonus on every one). So, I'm guessing she was able to help us out with the bank...
Daniel, if you don't mind me asking, what strategy are you using to flip? Land Trust, LLC, Double Close with trans funding, Simul Close using end buyer's cash?
HI Moe! I absolutely have no problems you asking...
I am specifically double closing. No land trust for me, LLC's or simuls. I just look to do the double close w/ trans funding.
For me personally, I find it easier. But thats just me. Plus, I love the excitement and rush of having my contracts accepted and finding the buyer b4 my inspection period ends. We generally have the buyer lined up for the property which makes it easier, but still a rush!
I have partnered with another investor that I have known for some time to find me the buyers, another good friend of mine in Utah who funds my deals w/ a sweet 1.5%, and my dad to give me escrow checks while I give him a sweet ROI.
So NO $$$ out of my pocket. Literally! Okay maybe a few bucks for marketing materials and gas...
Btw, I just requested a waiver of the 90-Day Fannie Mae title seasoning again today for another property, so I'll have another data point (whether they say yes or no) in the next couple days...
The situation is that the closing date specified in the contract is tomorrow, but the seller won't be ready to close until next week. So, as part of the amendment to extend closing, I also requested them to waive the 90 day seasoning...
HI Moe, thanks and your welcome!
We just want to make this thing as smooth as possible, understanding there are going to be some gliches, but we are ready for it.
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Aug 14 '09, 12:22 PM
