start by getting your buyers pre qualified first. Based on what they can and want to do then start looking for sellers. Use a combination of ads, signs and post cards to contact sellers and drive them to your website.
Visit your local real estate investors association to find a good course on selling houses
It is definitely a real issue. We are seeing requirements for seasoning from 4 to 12 months. I think the day of easy fix and flip are changing with the new underwriting criteria.
The only way to avoid it is to have a buyer with cash, hard money or private lender. Anyone needing conventional financing will struggle badly to close
I have been told by mortgage brokers that seasoning is not an issue after a major rehab; and I have never had a problem dong a cash out refi after a major rehab on property bought for cash.
Very easy gentlemen, buy the property using a land trust. The process eliminates the seasoning issue. If the seller creates the trust and conveys property to the trustee, you just transfer the ownership of the trust itself to you, the investor for consideration. You could buy the trust outright, or set up an end buyer who purchases the property from the trust.
You can do a "subject to" this way also - provides free financing.
[addsig]
This is all very interesting, and I was never aware of this new seasoning issue. Right now Sub-2, with seller financing, with the quick sale is the fast way to go. I am starting this with luxury homes, my only problem is how to pay for the auctioneer.
By the way, it should not be an issue since the mortgage via sub-2 will be in the sellers name, while you the deed.
Also, I have read about programs in which you can get the homeowner to pay you for taking their deed. How on Earth does someone do this?
Quote:
On 2008-08-22 00:31, omicron3000 wrote:
This is all very interesting, and I was never aware of this new seasoning issue. Right now Sub-2, with seller financing, with the quick sale is the fast way to go.
By the way, it should not be an issue since the mortgage via sub-2 will be in the sellers name, while you the deed.The seasoning issue refers to the deed, not to the mortgage.
Since 2006, FHA financing underwriting rules have required the seller to have been on title at least 90 days. Many conventional lenders have incorporated a similar title seasoning requirement in their underwriting guidelines.
Title seasoning is not an issue today. But, I would be very careful taking SUB-2, since you would be taking it at the current market rate, and the market is expected to drop another 10% within months. You might not be able to unload it for some time.
jackbenimble,
Are you saying that conventional lenders/loans such as BofA, Countrywide, Flagstar, etc... do not have seasoning requirements, or if you can substantiate the increase in price via reciepts for work done etc.. THEN they do not have an issue?
I have been out of the mortgage business for 2 years or so now so I do not remember all the UW guidelines for most of the major lenders.
For some reason, I remember they where OK with it, ONLY if you where NOT selling it for any more than you purchased it for (which defeats the purpose if you are trying to quick flip for a profit obviously) OR if you could show on paper how you fixed it up to justify the higher sales price.
I am getting ready to put a property under contract for a short sale and my biggest concern is the seasoning issue for a quick flip once I negotiate the payoff with the lender. I definitely want to buy low and sell low to sell it quick and get in and out. However, the property does not need any major repairs (minor landscaping).
Almost all the "gurus" seem like they use land trusts to avoid seasoning issues.
Again, I am just looking to purchase low and sell low without any Seller financing, notes to have to sell after, etc.. just a simple straight forward flip.
Quote:
On 2008-10-02 05:03, cjmazur wrote:
seems too rich to be true. By my calcs that would be 17.24% int. Do you due diligence.
Can you clarify on this? I understand due diligence but what calcs are you running? Also what do you mean by long escrow? Thanks.
Also, I should probably clarify that the loan is not 223K as I incorrectly stated. That would actually be the purchase price. The underlying loan balance is $196K at 9.4%.[ Edited by ramgon1280 on Date 10/02/2008 ]
Quote:
On 2008-10-02 12:05, ramgon1280 wrote:
Quote:
On 2008-10-02 05:03, cjmazur wrote:
seems too rich to be true. By my calcs that would be 17.24% int. Do you due diligence.
Can you clarify on this? I understand due diligence but what calcs are you running? Also what do you mean by long escrow? Thanks.
I was running 3000/month PV=223 for 30 years into a financial calculator
Also, I should probably clarify that the loan is not 223K as I incorrectly stated. That would actually be the purchase price. The underlying loan balance is $196K at 9.4%.
<font size=-1>[ Edited by ramgon1280 on Date 10/02/2008 ]</font>
finnapp, the proposition was wholesaling not retailing..
ergo leave some juice for the assignee.
Thanks Loon. I think I will look for a partner on this deal. What would be a reasonable fee to pay? I suppose a percentage of my cut would be the most logical and provide the best incentive for a good result.
I may have found an investor-buyer. The potential buyer sent me the following message in response to my ad. At the risk of sounding naive, what does this mean:
"We may have a buyer. This buyer would be an owner occupant so would you be willing to assign to us if we can bring you this buyer?"
I figured that I would be assigning the contract as standard procedure but the phrasing here makes it seem unconventional. Would this mean I would just be paid my fee in cash by the investor and just bow out of the transaction? Thanks.[ Edited by ramgon1280 on Date 10/04/2008 ]
Quote: I have had the situation come up where my wholesale buyer did not have the entire amount because I was wholesaling for large amounts, so what I did was get a partial deposit and then have a 2nd Trust Deed recorded against the property for the balance and get paid on the backend. Works awesome.
Jeff, are you saying that you had the seller execute a trust deed to you in the amount of your assignment fee to your end buyer? I guess I can see how that might work although I imagine disclosing your "large" fee to the seller could present some uncomfortable discussion between you and your seller.
[ Edited by ramgon1280 on Date 10/24/2008 ][ Edited by ramgon1280 on Date 10/24/2008 ]
start by getting your buyers pre qualified first. Based on what they can and want to do then start looking for sellers. Use a combination of ads, signs and post cards to contact sellers and drive them to your website.
Visit your local real estate investors association to find a good course on selling houses
[addsig]
It is definitely a real issue. We are seeing requirements for seasoning from 4 to 12 months. I think the day of easy fix and flip are changing with the new underwriting criteria.
The only way to avoid it is to have a buyer with cash, hard money or private lender. Anyone needing conventional financing will struggle badly to close
I have been told by mortgage brokers that seasoning is not an issue after a major rehab; and I have never had a problem dong a cash out refi after a major rehab on property bought for cash.
Chris
Very easy gentlemen, buy the property using a land trust. The process eliminates the seasoning issue. If the seller creates the trust and conveys property to the trustee, you just transfer the ownership of the trust itself to you, the investor for consideration. You could buy the trust outright, or set up an end buyer who purchases the property from the trust.
You can do a "subject to" this way also - provides free financing.
[addsig]
This is all very interesting, and I was never aware of this new seasoning issue. Right now Sub-2, with seller financing, with the quick sale is the fast way to go. I am starting this with luxury homes, my only problem is how to pay for the auctioneer.
By the way, it should not be an issue since the mortgage via sub-2 will be in the sellers name, while you the deed.
Also, I have read about programs in which you can get the homeowner to pay you for taking their deed. How on Earth does someone do this?
Quote:
On 2008-08-22 00:31, omicron3000 wrote:
This is all very interesting, and I was never aware of this new seasoning issue. Right now Sub-2, with seller financing, with the quick sale is the fast way to go.
By the way, it should not be an issue since the mortgage via sub-2 will be in the sellers name, while you the deed.The seasoning issue refers to the deed, not to the mortgage.
Since 2006, FHA financing underwriting rules have required the seller to have been on title at least 90 days. Many conventional lenders have incorporated a similar title seasoning requirement in their underwriting guidelines.
Title seasoning is not an issue today. But, I would be very careful taking SUB-2, since you would be taking it at the current market rate, and the market is expected to drop another 10% within months. You might not be able to unload it for some time.
jackbenimble,
Are you saying that conventional lenders/loans such as BofA, Countrywide, Flagstar, etc... do not have seasoning requirements, or if you can substantiate the increase in price via reciepts for work done etc.. THEN they do not have an issue?
I have been out of the mortgage business for 2 years or so now so I do not remember all the UW guidelines for most of the major lenders.
For some reason, I remember they where OK with it, ONLY if you where NOT selling it for any more than you purchased it for (which defeats the purpose if you are trying to quick flip for a profit obviously) OR if you could show on paper how you fixed it up to justify the higher sales price.
I am getting ready to put a property under contract for a short sale and my biggest concern is the seasoning issue for a quick flip once I negotiate the payoff with the lender. I definitely want to buy low and sell low to sell it quick and get in and out. However, the property does not need any major repairs (minor landscaping).
Almost all the "gurus" seem like they use land trusts to avoid seasoning issues.
Again, I am just looking to purchase low and sell low without any Seller financing, notes to have to sell after, etc.. just a simple straight forward flip.
Any further input would be great.
Thanks,
Your welcome. Good luck.
Hi! I am a Board Spammer and have nothing to offer in reality, except I need money.[ Edited by JohnLocke on Date 01/15/2009 ]
have have access to such a service (at least it worked for NC).
have have access to such a service (at least it worked for NC).
seems too rich to be true. By my calcs that would be 17.24% int. Do you due diligence.
Say she is willing to sell it for 230.
You put it under an assignable contract with a long escrow, and generous contingencies. Boom you control the house.
Now find someone that will pay more than 230, what every you want to make on it, say 280.
In consideration for selling it to the buyer, they pay you 50K and you assign the contract.
They then close and own the house.
If not, cancel the contract or as some say use a small ernest money deposit and walk.
Quote:
On 2008-10-02 05:03, cjmazur wrote:
seems too rich to be true. By my calcs that would be 17.24% int. Do you due diligence.
Can you clarify on this? I understand due diligence but what calcs are you running? Also what do you mean by long escrow? Thanks.
Also, I should probably clarify that the loan is not 223K as I incorrectly stated. That would actually be the purchase price. The underlying loan balance is $196K at 9.4%.[ Edited by ramgon1280 on Date 10/02/2008 ]
Quote:
On 2008-10-02 12:05, ramgon1280 wrote:
Quote:
On 2008-10-02 05:03, cjmazur wrote:
seems too rich to be true. By my calcs that would be 17.24% int. Do you due diligence.
Can you clarify on this? I understand due diligence but what calcs are you running? Also what do you mean by long escrow? Thanks.
I was running 3000/month PV=223 for 30 years into a financial calculator
Also, I should probably clarify that the loan is not 223K as I incorrectly stated. That would actually be the purchase price. The underlying loan balance is $196K at 9.4%.
<font size=-1>[ Edited by ramgon1280 on Date 10/02/2008 ]</font>
finnapp, the proposition was wholesaling not retailing..
ergo leave some juice for the assignee.
Thanks Loon. I think I will look for a partner on this deal. What would be a reasonable fee to pay? I suppose a percentage of my cut would be the most logical and provide the best incentive for a good result.
I may have found an investor-buyer. The potential buyer sent me the following message in response to my ad. At the risk of sounding naive, what does this mean:
"We may have a buyer. This buyer would be an owner occupant so would you be willing to assign to us if we can bring you this buyer?"
I figured that I would be assigning the contract as standard procedure but the phrasing here makes it seem unconventional. Would this mean I would just be paid my fee in cash by the investor and just bow out of the transaction? Thanks.[ Edited by ramgon1280 on Date 10/04/2008 ]
In a wholesale deal, do I still deposit the earnest money with a title company?
Quote: I have had the situation come up where my wholesale buyer did not have the entire amount because I was wholesaling for large amounts, so what I did was get a partial deposit and then have a 2nd Trust Deed recorded against the property for the balance and get paid on the backend. Works awesome.
Jeff, are you saying that you had the seller execute a trust deed to you in the amount of your assignment fee to your end buyer? I guess I can see how that might work although I imagine disclosing your "large" fee to the seller could present some uncomfortable discussion between you and your seller.
[ Edited by ramgon1280 on Date 10/24/2008 ][ Edited by ramgon1280 on Date 10/24/2008 ]
Hi, thanks for your interest. I flipped it to an investor for $15K.
There was just a long thread about this.
I think it was title something like alternatives to simultaneous close.
The short answer is this can be down, the big issue was finding a title company that would do a double close.
Why would you use a land trust with a REO? I have heard of this term when dealing with a Sub2 but not a REO