Title seasoning

Rehabbing & House Flipping
11yFollow

Title seasoning

Greg Wright
Investor · Wolcott, CT · Member since 2015 · 32 posts · 1 vote

How are flippers in CT handling title seasoning issues. I would assume your retail buyers are mostly first time home buyers using FHA or similar programs which have the restriction of no transfer for 90 days. Can a Land Trust be used to get around this?

0Reply
24 views

7 Replies

Jump to latestLatest
  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    11y

    @Greg Wright We have not run into this since the regulations changed.  The two buyers I have dealt with (1 as a realtor, 1 as an investor) here in CT this year so far that have been under contract and eventually purchased flipped properties before the 90-day mark both used conventional financing.

    One of the buyers was a first-time home buyer, but had financing through USAA where she put 10% down.

    0Reply
  • Greg Wright
    OP
    Investor · Wolcott, CT · Member since 2015 · 32 posts · 1 vote
    11y

    Thanks Mike,

     I rehabbed in the past but have not done it in several years, just trying to catch up on changes. Do you know anything about the Wolcott market seems to be a lot of houses sitting for 200 days plus?

    0Reply
  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    11y

    No, a land trust doesn't help. An FHA buyer can't buy the beneficial interest of a land trust.

    0Reply
  • Greg Wright
    OP
    Investor · Wolcott, CT · Member since 2015 · 32 posts · 1 vote
    11y

    Thanks Wayne good to know. 

    0Reply
  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    11y

    @Greg Wright There are a lot of reasons why houses in a town like Wolcott tend to sit in my opinion and here are some of them.

    • high taxes
    • the fact that it is near waterbury scares people away in some cases
    • a lot of 1st time home buyers do not want to deal with septic systems and wells
    • It is not very convenient to Hartford or New Haven from there
    • the inventory that sits there is overpriced

    With all of that said, there are beautiful areas of Wolcott as I am sure you know.  The main issue there is overpriced inventory.  As a whole if a sale price for a house around here reflects the condition of the house and is accurate it will sell.  A lot of people look to far into why a house doesn't sell.  In most cases it is just priced to high.

    0Reply
  • Jeff CopelandBusiness Member
    Real Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes
    11y

    I don't think there is a true "way around" the 90 day rule when selling to an FHA buyer - you have to wait it out.

    If it's a strong offer, the one thing that you can do is execute a contract prior to the 60 day mark (that way the buyer can start due diligence - they can proceed with home inspections, WDO, etc...pretty much everything but the FHA appraisal), then execute a new contract (with the same or very similar terms) on day 91.

    I have a flip under contract right now with this exact scenario...it's been a long road to closing (36 days and counting!), but not the end of the world.

    Copeland Morgan LLC4.770 Reviews
    WebsiteView Page
    0Reply
  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    11y

    Try, possession prior to closing, rent paid, then close on day 91. I wouldn't rent until they have a loan commitment. Wayne is correct and you don't need convoluted trusts stuff for a few days in carrying expenses, just follow the rules and customary tactics. :)

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free