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Rehabbing & House Flipping

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Shari Posey
  • Residential Real Estate Agent
  • Long Beach, CA
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432
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Flippers be careful about condo flips

Shari Posey
  • Residential Real Estate Agent
  • Long Beach, CA
Posted Dec 12 2010, 09:48

Maybe this is old news in this forum but I've been dealing with quite a few condo flippers that didn't realize that the potential buyers' lenders are going to put up a bunch of roadblocks and it's not going to be as easy as you think.
--FHA is the biggest road block to the majority of your buyers, especially in the lower price ranges. If the complex is not FHA approved, I wouldn't buy in it in hopes of a fast flip.
--I've run into buyers' lenders who don't want the seller to be an LLC.
--Be careful of delinquencies over or even near 15%.
--Be careful of too many rental units.
--Be careful of making too much money on your flip. If your profit is greater than 19.9% you can forget FHA and it will come under scrutiny for conventional.

Here in southern CA, if you need a quick flip and you plan on making a lot of money, I wouldn't invest in a condo.

These are just some helpful tips I have acquired, particularly working with buyers trying to buy condo flips--it's HARD!

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