Seasoning And Rehab
I'm new to RE Investing. I will be using a Hard Money lender to purchase and rehab an REO property. My goal is to quickly resell the property to a retail buyer.
Doe seasoning become an issue when the buyer is trying to get a mortgage loan since I will only have title for a few months?
It certainly can have an effect. Most lenders require 6-12 months seasoning on a property. But, if you save your receipts you may be able to ease some of their concerns by providing this information to them.
Here's another alternative..
You can find your buyer for the home, and verify there "papers" establishing and proving that they do qualify and have a purchase mortgage lined up for the home..
If their lender won't loan without the title being seasoned, you can temporarily rent the home to the new buyers with an option to purchase it.. Thus you are postponing the actual purchase until the title is seasoned and recovering all holding costs you are incurring on your loan..
Chris,
In my experience, although title seasoning appears to be a problem, in reality it isn't if you do a few things:
1. Get mechanics lien waivers (could be because of special Iowa law--don't know about other states)
2. Document before, during, and after each project using photographs and description. This isn't hard and I like to do it anyway.
I do not give receipts and what not but I am prepared to if the lender asks for them.
If you have the end buyer for the property. I have an owner financing solution. Seasoning will not be an issue. Up to 95% ltv, 600+ score. less than 600 available down to 575 at 85%. If interested PM me.
[addsig]