Seller Carryback As Remedy Lender's Title Seasoning Issues???
Hey everyone. This is my first post. I specialize in short sale quick turns. My typical case scenario involves negotiating the short sale, and then selling the property to an investor or a rehabber for a 10k profit. Even with my 10k profit these rehabbers/investors are getting a house for anywhere between 30% to 60% LTV. So it's a great deal all the way around, and most of the people on my buyer's list have an open line of credit or all cash, so title seasoning isn't an issue. The problem arises when I sell one of these properties to a conventional buyer. I've read quite a few of these forums, and it seems like everyone is having chain of title issues these days. Using land trusts and LLC's can combat this problem, although my experience is that banks are becoming more and more aware of these tactics, and are shooting them down at an increasing rate. Another new method is to dictate your end buyers financing, to make sure his/her lender doesn't care about title seasoning. How about this: sell the property to the conventional buyer for 10% below its most recent appraised value (somewhat wholesale), and then carry back 10% to 20% of the financing. It seems to me that if the lender see's that the purchase price is less than the FMV, and on top of that you are carrying back a note, they would know this is not a flip. After all the straw buyer scams in the past, lender's are wary of inflated values and flips. We as investors have to show them that these are not flips, they are wholesales. In a sense, we are making the market honest again. And as long as you prequalify the situation, you can still walk away with 10k on a deal structured this way. Has anyone done this and had success? Or are lenders still going to have flip issues?
everything you state is correct and to the point. What you wrote is the most positive post I've seen here this month.
Keep up the good work, I've been doing the same thing and have NEVER had a seasoning issue
Lori
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