Posted by Michael Morrongiello American Note on December 14, 1999 at 18:37:46:
Jeff / Darell
You might enjoy my post to Stacy “Your OK But…” on this issue. More and more lenders, note funders, etc. are becoming “gun shy” of these types of deals because a few bad apples ruin the buncb.
Michael Morrongiello
Operations Manager
“flipper” info - Posted by Darrell Toth
Posted by Darrell Toth on December 14, 1999 at 10:53:28:
Can someone explain what a “flipper is”. The guy I’m dealing with says he’s a Realtor crossed with a Mortgage broker. He sells the property and finances it with little money down. But he still uses CHMC for insurance. How does he make his money, does he take the realtors 7% cut and increase the property cost and make money from the interest. Does he bank roll the whole house?
Re: “flipper” info - Posted by Jeffrey Short
Posted by Jeffrey Short on December 14, 1999 at 11:42:52:
Darrell,
A “flipper” is simply someone who buy and sells a property; otherwise known as flipping or quick-flip or simultaneous close.
Now, I think that I know what the guy that you are talking about is doing. First of all, he may not be acting as a realtor in this transaction. Your state law, however, may require him to state that he is a realtor when he does any buying/selling.
It looks like the following is happening…
He finds a property that is for sale below what its appraised value is and makes an all-cash offer.
He offers to sell the property to someone, with little money down (10%), at its appraised value… and offers to take a mortgage for the remaining 90%.
At closing, he sells the mortgage to an investor or note buyer. The cash that is received from the note sale is used to purchase the property from the orginial seller…any money left over (less fees, of course) is his profit.
Makes sense?
Jeff