BiggerPockets

I can't remember if it was freddy or fanny, but a few weeks ago, a listing agent basically talked me out of making a cash offer.

The sfr needed a total gut, new iso, plumb,electric and termite repair. He said I had to sign a paper saying I'd live there 1 year and be moved in by 60 days. I told him I work alone, by that time, i'd be lucky to have the sheetrock rehung. He said they will likely check up on me and if im not moved in, they will fine me $10k and try to take the house back. I decided not to make an offer.

I didn't verify this info with the lender, so it could be all hogwash, but I figured i'd pass on what a realtors take on it was.

It's ironic that this program was set up to reduce investors competing. It does the exact opposite!

All the investors line up their offers and then on day 15~~viola!! Competition galore!

This is how I got both of my rentals. Had the offers written, submitted on day 15. Negoiated that day...done.

If you really want the house, get your offer submitted.

This is what they are trying to avoid.

Recently I sold a fix/flip to an end buyer, the kid had made an offer on every home in the neighborhood for 18 months but had a loan, and every other home was sold to investors who kept them as rentals. Mine, which he bid on before I fixed it, he also lost to a cash investor, me. Fortunately he was able to buy from me and got a better home than he would have originally.

But in the end, investors, who were gathering up rentals, were in fact crowding out this homeowner because he did not have cash - and this is a neighborhood that needs the stability of homeowners desperately.

Seems to me, the First Look program at least gives guys like this a fighting chance.

Yes, you are wrong. Regardless of how one intends to purchased, during the first look period, if you buy the home and close on it and do not live in it within 2yrs and they find out especially if you rent it out you can face a huge fine. The banks are not that stupid. Trust me, I want to do the same thing but there are many other deals available, keep looking.

Your contract (or an attached disclosure) should specifically state that you do NOT intend to occupy the property as your residence.

The listing broker has specific instructions from the seller to hold all non-OO offers until the "First Look" period expires. State and federal law requires all offers to be submitted anyway, so the seller will also hold the non-OO offers until after the "First Look" period expires. Don't put the broker in a bad spot by submitting a non-OO offer before the expiration.

Use the "First Look" waiting period for a detailed inspection with your General Contractor to write a "scope of work" estimate with labor & material costs. Get your financing ready and submit an all cash offer with proof of funds at soon as the waiting period expires.

Never sign an affidavit without your attorney reviewing and approving it.

Beware of deed restrictions or performance liens that prevent you from reselling the property within a limited time period.