Professionally I have been managing/flipping 200+ unit apartment communities for 10 years, now I'd like to do a few single family deals on my own to supplement my income. I have financing lined up, a set of contractors at my disposal and I believe I am ready to move on a few foreclosures that I have found.
One of the deals that I found can be picked up right now for $100K, the house right next door just sold for $150K and the foreclosure is 200 sq/ft bigger. There is only $4K in rehab costs necessary, and I get the work done w/in 1 month of closing.
As I mentioned, I'm new to single family so I ran this by a loan officer that I know. His concern was that if I buy the house for $100K this month then place the house on the market for $150K+ next month, that the buyer's financing would have an issue approving the loan since the house was just sold the month prior for $50K less.
Has anyone ever had this issue when flipping? Thanks in advance for any insight you can provide!
I have a really stupid question. Even two.
1. Why do you want to do single family if you already did apartments? There is so much more money to be made in apartments that looking at single family is not worth your time if you have apartment experience.
2. Why flip at all? In your example, just rent his house for one year and then sell to that very renter. Benefits: rental income, saving on taxes (cap gains vs ordinary income), savings on realtor commission (you sell directly to a buyer thus no realtor fees to be paid), you get extra month of rental income while the buyer gets financing, etc.
not stupid, I should have explained more thoroughly.
1) I am the vp for my company, I do not own the assets, I nearly run the operations overseeing management, maintenance and rehab crews. Id like to get something on the side in order to save up enough to work up to Multifamily myself.
2) I may move out of the area in the coming 6 months with my job and may not want to deal with renting the house out.
I'm surprised no one was able to answer this... anyone?
If you buy with hard money loan you will be able to refinance right after rehab at 75% of ARV
Hello Brad, to answer your question 'YES' I have experienced this & the buyer's loan officer called and asked if I was flipping the home. After answering yes, she then asked if I would allow the buyer to write the offer up closing 3 months and 1 day later (from date of my recorded deed) because the underwriter wanted 3-months of seasoning on the title By me.
With lending still being very restrictive I don't even try to sell sooner than 3 months unless you are vying for a cash offer. Good Luck !!!
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