Posted by MicheleCO. on December 27, 2004 at 22:17:31:
NT
Flipping and Seasoning - Posted by Mike-OH
Posted by Mike-OH on December 25, 2004 at 19:54:15:
I am in the business of buying, rehabbing, and renting properties. I would occasionally like to “flip” a property to a retail buyer (not another investor) and have tried unsuccessfully to do so in the past year. In my experience, nearly all lenders with conforming loans will not permit flipping and many (or most) of the lenders of non-conforming loans will not permit flipping either. Flipping has attained a very high profile during this past year as is evidenced by recent posts on this list and numerous articles in major newspapers.
Has anyone successfully flipped a property using a reputable, conventional lender for the buyer. I have absolutely no interest in using a hard money lender to finance the retail buyer, which can be (properly or improperly) construed by government agencies as predatory lending and subject the seller and lender to litigation and possibly prosecution.
If anyone has flipped a property during the last year with conventional financing, I’d love to hear the story.
Thanks and Merry Christmas!
Mike
Re: Flipping and Seasoning - Posted by dave
Posted by dave on December 26, 2004 at 19:27:58:
i’ve got several lenders who don’t require seasoning on rehabs. as long as you did the improvements and can document them, (receipts, before and after pics) there’s no problem
Re: Flipping and Seasoning - Posted by Rob FL
Posted by Rob FL on December 26, 2004 at 11:34:54:
In addition to doing what JT mentions and calling the lender directly before even signing the contract, I put special language in my contract.
The language I use discloses that I have owned the property for less than 12 months and that any loan denials or delays based on my time of ownership or my purchase price are not considered acceptable denials/delays by me. This way, it becomes a major problem for the buyer (or at least to their earnest money deposit) if a problem occurs down the line after I’ve disclosed this info to the buyer and their lender.
Re: Flipping and Seasoning - Posted by Gary-OH
Posted by Gary-OH on December 25, 2004 at 22:10:07:
If your in the Akron area try North Akron Savings. The smaller banks have less a problem with them. Stark county you can use Consumers National Bank.
Good luck,
Gary
Re: Flipping and Seasoning - Posted by Dave NY
Posted by Dave NY on December 25, 2004 at 20:15:23:
I attended a seminar where I learned how to flip regardless of lender policy. The key is to have the home pass directly from seller to your end buyer. You protect your position by assigning your rights to seller or by signing a consulting agreement for a percentage of the sale. At closing you pick up your check.
This way chain of title has seller assigning deed to buyer & you’re out of the picture but you have your position protected as already mentioned.
I have done several long distance deals this way also.
The seminar I learned this is :paperbiz.com AKA graystone mortgage.
Excellent training!
Dave NY
Nearly 100% are retail flips… - Posted by JT-IN
Posted by JT-IN on December 25, 2004 at 20:10:35:
To retail buyers who are using conventional financing. My market is A credit buyers and seasoning is just not a problem in those cases…
What I do when I accept a contract to purchase from a buyer, or their agent, is to immediately speak to their intended lender. I make them aware of the fact that I (my company) have been on title only a short period of time. In other words, I hit the seasoning issue right square in the nose… I then ask the mtg lender or banker if there is any problem with title seasoning…? Most times they will either say NO, or they may comment that they will need to use a different lender, with those circumstances…
You never wait to hear from the lender that there is a seasoning problem… You take matters into your own hands, and if there is going to be a problem, you learn about the day after, or at the time that you accept the contract. Worse case, if they cannot get financed, you are off the mkt for a day… or two. But this rarely happens… in fact I can’t remember the last time it did… That is in selling 15 or so properties per year on a conventional basis… “That’s my story and I’m sticking to it”.
JT-IN
Mind sharing verbage please? NT - Posted by MicheleCO.
Posted by MicheleCO. on December 26, 2004 at 14:28:55:
NT
Re: Flipping and Seasoning - Posted by ReggieSC
Posted by ReggieSC on March 14, 2006 at 03:11:17:
Hi Dave. Just read your post in the archives of Creonline.com. Are you still w/Graystone? If so, would you still recommend them?
Re: Nearly 100% are retail flips… - Posted by ron
Posted by ron on December 26, 2004 at 11:28:32:
Yep JT is right.
Robyn Thompson who does more than 50 homes per year, gets first time and FHA buyers that usually need $700 down and FHA only has 90 days of seasoning, thus she continues to keep turning them this way.
She does not do subprime, or play the carryback paper game, that is what works for her.
Re: Mind sharing verbage please? NT - Posted by Rob FL
Posted by Rob FL on December 27, 2004 at 11:58:07:
"Seller hereby discloses that they may have owned the Property for less than 12 months, and any loan denials or delays based on the length of time Seller has owned the Property or the price Seller paid for the Property shall not be considered an acceptable denial or delay by Seller. "
Re: Flipping and Seasoning - Posted by Dave NY
Posted by Dave NY on March 15, 2006 at 19:51:22:
Hi,
No I don’t work with Graystone. I don´t need to as I learned their inverse purchase strategy at the live seminar when it was in San Antonio 4 yrs ago.
I definitely recommend their live seminar training. I have managed to close an average of 4 deals a year working part time. This yr I will the system full time.
Dave NY