All Forum Posts by: Robert Littke

Its really fairly simple. The FHA and Lenders are coming down hard on three things.
1) Any attempt to mislead who owns or is selling the home
2) Any attempt to mislead who is buying the home.
3) Any attempt to mislead where ANY amount of money is coming from or going to in a real estate transaction.

Since all of these things have been fairly common in the practice of flipping, and they are now considered mortgage fraud, (which is illegal) It could appear that flipping is an illegal activity.
I don't do flipping, I rarely handle any residential transactions. But I can tell you as a realtor, we constantly get it drummed into us, that if we engage in anything that looks anything like the above, we are to run the other way, and not participate in the transaction, or we could lose our licence, be fined, or go to jail. So, when we here it again and again from the real estate commission and we get our monthly publication showing us all the names of the brokers who helped out a flipper and lost his license, we tend to pay attention.

IMO You must use comps because that's what your potential buyers are doing, going from "like home" to "like home" and deciding which one is the best value. Which brings me to your next questions, you have to price on the low end of the comps, especially in todays market. People are expecting a good value when they buy. If they can get a similar home down the street for less, which one are they going to buy? Price ahead of the market. Look at homes for sale, homes sold, and expired listings. But IMO the most important of those is, what comp can I buy TODAY and whats the price.

Every month I get a letter from the real estate commission that shows me the brokers who lost their license and are facing legal action for A) commitment mortgage fraud B) Not acting in their clients best interests.
Last year of the nine lawyers in this state who lost their license last year, seven were to real estate fraud.
I've never seen the name of a Flipper in that list, and you will never see my name on that list.
Brokers don't "not like you" they don't care about you, they care about their licenses and what feeds their families and pay their bills.

Thanks Bill, the daughter of the lady is a friend, and she's also an accountant and is pushing for the deal with mom.
Question, this just came to mind. What about "A" not being able to get a loan on house #2 until the loan on #1 is closed (which wont be until its funded from the proceeds of the closing of #2.) Is this an issue? or is this something that lenders would see the big picture and 'let ride' so to speak

OUT! and follow every law to the letter, document every step. If she can throw you under the bus to keep on section 8 she will try an bury you.

I had to revise the post when I re-read your questions. I don't know about your state, but here, a listing agent is going to assume that your not using a standard offer to purchase because you are trying to ignore elements that protect thier clients interests and tell you to get lost.
You can probably download your states standard offer to purchase and essentially tailor the offer in the terms and conditions that work for you, why not use it?

Albert, I would open a new thread with this question, you will get a lot of great answers if you do.

Thanks for all your input Bill, "A beautiful symphony of strategic finance" I like what I'm seeing, I just have to digest it all. I may have some questions for you to "wrap my head" around some of your suggestions, but from what I understand it looks strong. Obviously nothing can save you from ever headache, but the goal would be to not create anymore headache than you already have. : )

I had a very successful commercial developer tell me early "Find the type of property and people you like to work with and stick with it" I believe you can be successful at with either model if the numbers work and your comfortable with it. I have owned out of state property and I didn't care for it. I'm a bit of a control freak and I like to see whats going on, but that's just me. I know that making the numbers work is what its all about. It all comes down to a level of involvement your comfortable with.

Bill, Trust isn't an issue at this point, "300" is 85 Years old and her familly is a little concerned about what would happen if she ended up in a nursing home or passed durring the "term". 260's Home is in NC where's 300's two daughters live, and 260 needs to go back to FL, thats where 300's home is now and sitting vacant. 260 has a stong established business in FL.
I was thinking allong the lines of $1500 rent, +$200 Towards Down Payment and $35.00 Option Money, with balance due in 36 months. or something of that sort, or as you say 260 keeps paying the mortgage of $1600 on 260 house. Again, the concern for both would be, if something happened to 300, then 260 would be have deal with both homes until 260 could be sold or re-rented, and that could be challenge from 700 miles away.