FANNIE MAE REO - YOU CAN FLIP THEM IN 24 HRS!!!
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:
Congratulations Drenda!! Did you pay the deposit or your buyer? How much did you put down?
Thanks Dymond, My buyer paid the 1k deposit
I plan on making offers on some REO properties this week. After reading this post I am more confident about what to ask, I will be doing the double close and will let you all know how it goes.
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Yes, it was in the directive when the waiting period was imposed. And, we had other threads about exceeding the limit, you can sell for more if you have the costs of improvements documented. Purchase at 100K put 25K in it, you can sell for 125 + 20% or 151,250.(think I did that right in my head lol)
I always like the FNMA better than regular REOs. I guess it the idea of dealing with the same agent on a regular basis, which I don't have anymore. Last FNMA deal I tried to flip, flopped. I negotiated with a different broker until an acceptable price was reached. Kept waiting for close to 2 weeks for a closing date. Had several people seriously interested, with 3 ready to put deposits up. Into 3rd week, broker phoned and said a higher offer was faxed in after hours on friday, and I was out. I felt mt deal was handled very poorly and told them where to put it. Was the last FNMA I even tried to purchase. I guess I need to get over it and move on. That is just not the way I like to do business. Made me look bad in the eyes of my buyers. I do believe the problem with the deal was there was an asset manager in San Diego dragging their feet. Ready to move on to the next one and hope it goes better!
Originally posted by Financexaminer:
...you can sell for more if you have the costs of improvements documented. Purchase at 100K put 25K in it, you can sell for 125 + 20% or 151,250.(think I did that right in my head lol)
As we've discussed in many other threads, the deed restriction is very clear that the 20% profit applies *only* to the purchase price and not any improvements. I believe Bill has argued this point many times, and most other investors here disagree with him.
Not saying you can't sell for more (you can do anything you want if the closing agents don't try to stop you), but by selling for more than 20% above the purchase price, you are violating the deed restriction.
In fact, I've posted the *exact* wording of the restriction two or three times on other threads -- it's not at all ambiguous...go read the restriction yourself and I'm confident you'll agree with this determination (as my real estate attorney did as well)...
Is there any way to get the deed restriction removed from an auction.com property that is a Fannie?
Also, If I use a HML to purchase, fix up and hold for the 3 month period, do I need to wait to actually sign the contract AFTER the 3 month period, or can it close after the 3 month period with a contract that was signed before the 3 month period ended?
And (sorry, lots of ?s), is there a limit after the 90 days that I may sell it for? Or is it just that noone can use FNMA for their loan, should they require a loan? Can you carry some of the down payment so the buyer does not require PMI to bypass that, or is it strictly to do with FNMA and nothing at all to deal with PMI?
Sorry, doing my first FNMA and want to go over the sites I frequently visit (but don't often post to!)
Best to you!
It is CERTAIN we will SUCCEED!
REDC's auction.com has only recently began to add on the 20% rule. We purchase a healthy amount of properties through them for each time they decide to visit us (which seems to be once a month). To date, I have not been able to have them eliminate the 20% clause. In one of our last transactions, the property couldn't be conveyed due to the parcel being split between FNMA and the Treasurer's Department (due to back taxes), therefore title couldn't convey a clear title. The only thing we requested was for them to remove the 20% clause within 90 days, and we would take the clouded title, but they, of course, refused and we are still sitting waiting to close.
Originally posted by Tammy Reoch:
Also, If I use a HML to purchase, fix up and hold for the 3 month period, do I need to wait to actually sign the contract AFTER the 3 month period, or can it close after the 3 month period with a contract that was signed before the 3 month period ended?
The restriction says nothing about when the property is put under contract, so there is no reason why you can't put the property under contract for sale at any point after you purchase it. You just can't convey the deed for more than 20% above the purchase price within 90 days of purchase.
And (sorry, lots of ?s), is there a limit after the 90 days that I may sell it for?
Nope, after 90 days the deed restriction is expired and you can do anything you want with the property without restriction from FNMA.
Homepath Escrow Deposits 10% ??? Does anyone know a way around this? Most of the properties I'm looking at are in the 80K range... so if i'm wholesaling just 3 properties a month that's almost 30k out in deposits.