Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
17y
There is no good way around the FHA 90-day seasoning. The "waiver" is only a waiver for banks and other asset managers who have foreclosure inventory -- it's NOT for investors who are looking to flip the property.
If you plan to flip to FHA buyers, expect that you'll have to wait 90 days before you get the property under contract and then another 60 days to get to closing. Some lenders can shorten this time period, but it depends on the specific investors/underwriters they're working with.
If you really need to work around the 90 day seasoning, you can either:
- Work with small, local banks to arrange financing that is similar to FHA, but that is funded in-house and therefore not subject to FHA rules;
- Put together a lease-purchase that will get your buyer into the property prior to 90 days, and then you can close after the seasoning period.
Sorry, but there are no "magic bullets" around the FHA rules...
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
17y
Originally posted by Niki Roberts:
Can someone answer this question for me since all of you seem to be experienced with this. is this correct, FHA will not let you buy the home as an owner occupant until 180 days?
That is NOT true. FHA will fund the loan after 90 days, though the specific amount of time you have to wait to put the property under contract can vary from underwriter to underwriter.
For example, most underwriters won't allow you to submit a contract and get the loan started until Day 91. But, the underwriter I use will do the appraisals and get the ball rolling early, then close on Day 94-96.
We are trying to get into our first flip but we cannot hold on to the property that long!
If you're dealing with first-time homebuyers, expect to hold the house for at least 4 months, if only because of the 90-day FHA rule...
Las Vegas, NV · Member since 2009 · 196 posts · 32 votes
17y
Maybe I'm missing something here, but, since transactional "flip" funding is limited to 1 day, and unless an investor's own cash or hard money is used, where on earth do investors such as Andre obtain the funds that will enable them to purchase, rehab, and resell for as long as needed???
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
17y
"Flip" is sometimes used to mean wholesaling and sometimes to mean fix and flip. Andre's doing fix and flips. I would assume its his money, his investor's money, or hard money.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
17y
Originally posted by Jon Holdman:
"Flip" is sometimes used to mean wholesaling and sometimes to mean fix and flip. Andre's doing fix and flips. I would assume its his money, his investor's money, or hard money.
Exactly. If you are a rehabber, you had betetr have your own cash or have private investors (or hard money) to fund your deals.
Investor · San Antonio, TX · Member since 2009 · 51 posts · 10 votes
17y
Originally posted by Andre Scott:
I offered the bank 160k, and they accepted the deal. Closed it in 7 days CASH
Andre, how did you get the bank to close in 7 days? Is this common for anybody else? I have been buying REO's for years and the fastest closing was 3 weeks.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
17y
Originally posted by Jaime Vasquez:
Andre, how did you get the bank to close in 7 days? Is this common for anybody else? I have been buying REO's for years and the fastest closing was 3 weeks.
I've had one close this quickly, but most are 2-4 weeks. If the property was under contract previous to yours (and fell through), it's possible most of the title work had already been completed, in which case it was just a matter of preparing the HUD and getting it on the closing schedule.
Involved In Real Estate · Member since 2010 · 2 posts · 1 vote
16y
Hi- I need some help from the investors out there that are buying,fixing and flipping before 90 days and making more than a 20% profit. I see all these great ideas above, however, I have addendums from Fannie Mae stating that you can't make more than _____ amount of what we are purchasing it for, and that just isn't possible. It's a $60k home that needs $10k in repairs, and they are saying we can't flip for more than $72k. I know there is some way around this, or there wouldn't be all these investors out there making $20k+ profit on their flips before 90 days. Can someone please help me with this? I have until Monday to respond, or amend the contract.
Residential Real Estate Broker · Grand Blanc, MI · Member since 2008 · 885 posts · 316 votes
16y
I agree. I have just been holding them, or in one instance, I did a short term land contract with the buyer until they get the mortgage to cash me out. Land contracts seem to be a grey area in FNMA deed restriction guidelines. So far it has not been an issue.
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
16y
Originally posted by Niki Roberts:
... It's a $60k home that needs $10k in repairs, and they are saying we can't flip for more than $72k. I know there is some way around this, or there wouldn't be all these investors out there making $20k+ profit on their flips before 90 days. ...
thanks
Fanie Mae does this via a deed restriction, so it will be recorded that way. No getting around that.
So, how do you make the bigger dollar amounts then? Well, you get properteis with bigger dollar amounts for the ARV :D
Hard to imagine making $20K on a $60K purchase while doing nothing to improve the property. Much easier to believe if that $60K becomes more like $180K ...