I just found out today that my current deal which is supposed to close this Friday is subject to the FHA anti-flip law because the purchase price was less than half of the sale price to the current buyer. Last time I had this happen the second appraisal came in $13,000 light, and I had to eat it. In this scenario I'm only off by a couple thousand dollars. In fact if I ignored seller concession the anti-flip lot wouldn't apply.
Does anyone know if the anti-flip law states that my purchase price has to be greater than my affective sale price, or do I have to be greater then the total purchase price which Includes $3000 seller concession.
In other words I paid 43,800, I sold it for 90,000 to the Envir which includes $3000 seller concession
Do they sometimes wave this if the numbers are close.
It sounds like the initial price paid without concessions Here is the update
That would be assume. Thanks
Hey Robert sounds like the 90 day rule FHA has which sucks! I wait on the 91 day to list it and it works out great.
The appraisal has to be within 5% of the sales price. In the real world the BCC concessions are real money but not to HUD. I guess they see it as our duty to help the less fortunate.
If you are flipping a property that is priced where your likely buyer is going to be an FHA buyer, then you just need to hold the property to 91 days.
Also you mention appraisal issues twice....are you using a listing agent? Part of what a listing agent does is make sure the property appraises. If you are, now that you have had 2 properties not appraise, then it sounds like this is a skill your agent may be lacking in and may need to get some further training on