JUST CLOSED A REO FLIP!!

37 Replies

Can someone answer this question for me since all of you seem to be experienced with this. is this correct, FHA will not let you buy the home as an owner occupant until 180 days? I am also understanding that some conventional loans are requiring the same type of seasoning? Is this true? We are trying to get into our first flip but we cannot hold on to the property that long! Obviously in this market, buying a home and having it remodeled to flip and putting it back on the market is the way to go, especially if you are dealing with a first time home buyer. The want to move into something brand new, not something they have to fix up themselves because they do not have the out-of-pocket cash!

Originally posted by Niki Roberts:
Can someone answer this question for me since all of you seem to be experienced with this. is this correct, FHA will not let you buy the home as an owner occupant until 180 days?

That is NOT true. FHA will fund the loan after 90 days, though the specific amount of time you have to wait to put the property under contract can vary from underwriter to underwriter.

For example, most underwriters won't allow you to submit a contract and get the loan started until Day 91. But, the underwriter I use will do the appraisals and get the ball rolling early, then close on Day 94-96.


We are trying to get into our first flip but we cannot hold on to the property that long!


If you're dealing with first-time homebuyers, expect to hold the house for at least 4 months, if only because of the 90-day FHA rule...

Maybe I'm missing something here, but, since transactional "flip" funding is limited to 1 day, and unless an investor's own cash or hard money is used, where on earth do investors such as Andre obtain the funds that will enable them to purchase, rehab, and resell for as long as needed???

Someone kindly elaborate!

"Flip" is sometimes used to mean wholesaling and sometimes to mean fix and flip. Andre's doing fix and flips. I would assume its his money, his investor's money, or hard money.

Originally posted by Jon Holdman:
"Flip" is sometimes used to mean wholesaling and sometimes to mean fix and flip. Andre's doing fix and flips. I would assume its his money, his investor's money, or hard money.
Exactly. If you are a rehabber, you had betetr have your own cash or have private investors (or hard money) to fund your deals.

Originally posted by Andre Scott:

I offered the bank 160k, and they accepted the deal. Closed it in 7 days CASH

Andre, how did you get the bank to close in 7 days? Is this common for anybody else? I have been buying REO's for years and the fastest closing was 3 weeks.

Originally posted by Jaime Vasquez:

Andre, how did you get the bank to close in 7 days? Is this common for anybody else? I have been buying REO's for years and the fastest closing was 3 weeks.


I've had one close this quickly, but most are 2-4 weeks. If the property was under contract previous to yours (and fell through), it's possible most of the title work had already been completed, in which case it was just a matter of preparing the HUD and getting it on the closing schedule.

Hi- I need some help from the investors out there that are buying,fixing and flipping before 90 days and making more than a 20% profit. I see all these great ideas above, however, I have addendums from Fannie Mae stating that you can't make more than _____ amount of what we are purchasing it for, and that just isn't possible. It's a $60k home that needs $10k in repairs, and they are saying we can't flip for more than $72k. I know there is some way around this, or there wouldn't be all these investors out there making $20k+ profit on their flips before 90 days. Can someone please help me with this? I have until Monday to respond, or amend the contract.

thanks

Niki -

There is no good way around it, other than waiting more than 90 days or avoiding FNMA properties.

Sorry...

I agree. I have just been holding them, or in one instance, I did a short term land contract with the buyer until they get the mortgage to cash me out. Land contracts seem to be a grey area in FNMA deed restriction guidelines. So far it has not been an issue.

Originally posted by Niki Roberts:
... It's a $60k home that needs $10k in repairs, and they are saying we can't flip for more than $72k. I know there is some way around this, or there wouldn't be all these investors out there making $20k+ profit on their flips before 90 days. ...

thanks


Fanie Mae does this via a deed restriction, so it will be recorded that way. No getting around that.

So, how do you make the bigger dollar amounts then? Well, you get properteis with bigger dollar amounts for the ARV :D

Hard to imagine making $20K on a $60K purchase while doing nothing to improve the property. Much easier to believe if that $60K becomes more like $180K ...

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