FANNIE MAE REO - YOU CAN FLIP THEM IN 24 HRS!!!

85 Replies

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:

Now, Have you closed already. Let us know if there's any complications, glitch, pain, and etc.

Sounds good that we could to fannie mae and all of these and that.

I guess that doesn't apply to HUD, correct?

Daniel -

You should be able to great rid of FNMA title seasoning restriction most of the time just by submitting an amendment with this request.

In my experience, most of the asset managers at FNMA won't put up too much of a fight, especially if you make the request during a contingency period.

That way, you can flip for as much money as you can make, as quickly as you can find a buyer...without any restrictions...

Originally posted by J Scott:
Daniel -

You should be able to great rid of FNMA title seasoning restriction most of the time just by submitting an amendment with this request.

In my experience, most of the asset managers at FNMA won't put up too much of a fight, especially if you make the request during a contingency period.

That way, you can flip for as much money as you can make, as quickly as you can find a buyer...without any restrictions...


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:

Originally posted by Amanda Herr:
Now, Have you closed already. Let us know if there's any complications, glitch, pain, and etc.

Sounds good that we could to fannie mae and all of these and that.

I guess that doesn't apply to HUD, correct?

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...

Originally posted by J Scott:
You should be able to great rid of FNMA title seasoning restriction most of the time just by submitting an amendment with this request.
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?

Originally posted by nationwidepi:
Have you actually closed a transaction with this ammendment accepted?


Will -

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.

Interesting, I wonder if this approach will work in my market as it has for you in yours.

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.

Originally posted by Rich Weese:
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...

Does that answer the question?

Thanks for the info J, I am going to try this on my next REO. If it works, that opens the door for me 1000 fold!

If it does work, look out, those wanting to join our REO make me an investor program are really going to make out like bandits in my market!

I will let you all know if this is accomplished or not here in CA.

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?

Thanks.
Moe

Originally posted by Moe M.:
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?

Thanks.
Moe

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...

Fingers crossed...

Hey Daniel thanks for sharing. That is awesome man, you got a nice system and team in place.

Keep on making things happen!

Moe

Originally posted by J Scott:
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...

Fingers crossed...

Much success on this deal! Let us know what happens...
I am sure they will waive the deed restriction.

Originally posted by Moe M.:
Hey Daniel thanks for sharing. That is awesome man, you got a nice system and team in place.

Keep on making things happen!

Moe

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.

Much success to you as well!!! :cool:

I see you said one of you puts the house under contract and the other finds the buyer I dont have the good fortune yet of a partner. If I dont have a buyer in mind already they when can I start to market the property. Can I do it once I put in the contract or should I wait until it has been approved. Thanks for any information you can offer.

Daniel sorry for so many questions but how long is the inspection period usually. and I thought if the property was being sold as is there is no inspection. Or at least in some o f the listing I have seen is says inspection is only for your purpose or something like that.

And also like I said in one of my previous messages when do you start to market. Is it ok as soon as you put in the contract. Can you pitch it to someone you know may be interested without giving them the exact address. PLEASE HELP..

Originally posted by J Scott:
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...

Fingers crossed...


Just to update, we received word today that the seller signed our amendment waiving the deed restriction, and allowing us to resell the property as quickly (and for as much) as we want.

So, there's another data point that FNMA will do this...

Originally posted by J Scott:

Just to update, we received word today that the seller signed our amendment waiving the deed restriction, and allowing us to resell the property as quickly (and for as much) as we want.

So, there's another data point that FNMA will do this...


As another data point, we put another FNMA property under contract last week, and requested the waiver of the deed restriction this morning (we're currently in our due diligence period).

The listing agent didn't even submit it to the asset manager at FNMA, and just replied to us, "This is required in every FNMA contract...they can't remove the restriction."

So, we had to explain that we've had the restriction lifted several times before, and kindly requested that he at least submit it to FNMA for them to consider it.

We'll see if he at least submits the request for us (that's his job, of course)...

J Scott, now all you need to do it find away to get around the agents and your transactions will be smooth sailing!

It amazes me how often an agent will say you cant do that or it is illegal, etc. just because THEY don't understand how or that it CAN be done.
If I was a rookie or even seasoned agent, I would NEVER tell someone something like that. I would NEVER want to interfere with my ability to make more commissions!

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