Sanford, FL · Member since 2017 · 7 posts · 0 votes
Hey everyone,
I have a question about what happens if I intend to sell my very first home within 6 months. The thought was to use the low downpayment offered for home buyers, buy a rehab , fix and sell.
I know there may be a tax on the capital gain, anything else could become an issue?
Would I be fined for doing so? Any consequences on the realtor?
Thank you all !
@Ibrahim Alanqar, the first thing that springs to my mind is: how will you find suitable deal/s for flipping, when you'd always be competing with cashed-up Investors/Flippers in the first place, who don't have to wait the length of time you would need to in order to close (and who therefore can get discounts easier than you, even though you'd need those same discounts), and who don't have to worry that the home may not pass the "habitable" test.
Also, FHA-approved Lenders may take a dim view if you started making a habit of it! Just sayin'...
@Ibrahim Alanqar, the first thing that springs to my mind is: how will you find suitable deal/s for flipping, when you'd always be competing with cashed-up Investors/Flippers in the first place, who don't have to wait the length of time you would need to in order to close (and who therefore can get discounts easier than you, even though you'd need those same discounts), and who don't have to worry that the home may not pass the "habitable" test.
Also, FHA-approved Lenders may take a dim view if you started making a habit of it! Just sayin'...
@ Brent , thank you for your input.
The properties I am looking at do not need major repairs and many are bank owned- foreclosures.
There is cash to go for investor loans with 20% down, but thought to see the option of going as a first home buyer so the ROI (at least for the first property) is good.
I understand that trying to do this several time will raise red flags for the lenders, but what if once or twice only before going in with more cash? That’s basically what I am asking for- will this once or twice sell of a home-owner loan less than a year will result in any penalties (besides the gain tax)?
@Ibrahim Alanqar, as well as the cashed-up competition (including genuine owner-occupiers), you also need to consider: mortgage fraud! Afaik, your FHA-approved Loan will only be granted if you sign that you intend it to be your home for at least a year!
[What if your Lender googles your name - and finds this thread?]
Also, in desirable locations, are Banks really letting them go for much less than market value?...
@Brent Coombs : thanks for the input, I appreciate it.
I looked more into it and it seems better , from a business stand point also, to separate business loans from personal home loans.
Thanks again Brent !