How Soon Can I Cashout On A Sub 2 Property?
I have an opportunity to buy a property that's in preforeclosure..... $6500 will cure the foreclosure and bring the loan current
My question is how soon can I cashout on this property with a loan, sell to an end user, etc.
I understand I can place a tenant buyer in the home but I would rather get someone that can qualify for a loan. Would seasoning issues prevent this from happening?
Specs on Deal:
ARV: $60,000
Loan Bal: $30,000
Repairs: $2000 or less
Seller will take payoff and walk....
You can certainly take the property sub2, fix it up, and then resell to and end buyer with conventional financing.
I'm actually in the process of doing this right now.
You'll run into seasoning issues however you buy a house. The key is to have your buyers work with lenders that don't care. I personally have never had an issue so I do think that this is a location based concern.
wouldnt a Land trust do the trick?
Quote:
On 2004-08-21 18:21, myfrogger wrote:
You can certainly take the property sub2, fix it up, and then resell to and end buyer with conventional financing.
I'm actually in the process of doing this right now.
You'll run into seasoning issues however you buy a house. The key is to have your buyers work with lenders that don't care. I personally have never had an issue so I do think that this is a location based concern.
can someone explain seasoning to me?
Bascially it's about time, and 'fingerprints' on the deed. The more times a property changes hands in a given time frame (say, a year) the more nervous lenders get about lending on it, and the more nervous attorneys get about issuing title opinions on it.. Justified or not, short holding times suggests problems. Probably for the same reason you get nervous about a property that you notice keeps getting bought and resold.
Seasoning of Title has become a big issue over the last year. I am a mortgage broker and R/E investor , Although there are several lenders that do not require Title Seasoning the rates are significantly higher than if it had at least 12 months seasoning. So even if you paid cash for the property and went to retail the property you are marketing a property to a potentially A+ borrower who would have to get a Sub-Prime type of Loan. It is frustrating to me and alot of investors that I work with that Through our hard work and knowledge we were able to buy a property at 65% of ARV and can no longer retail to a good borrower with an interest rate that they could get if they were to buy a similar home where the seller had owned the property for at least a year.
IMO Appraised value should be Value not what someone with great RE knowledge
and negotion skills are able to purchase the property for. Isn't that why Walmart can sell some of their products less than other retailers because they know how to find the best Wholesalers?
So I have evolved with the changes and buy right and simply plan to hold for at least 6months to a year where tiltle seasoning does not create an issue for any of my potential buyers.
It depends on who your buyer uses to get the loan (IF they use one) to cash you out.
If you have a creative mortgage broker that is able to find a good program (no seasoning issues), then you could go that route.
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