How To Flip --- Legally
Ok, so I've done more reading and I'm leaning towards focusing on foreclosures and double closings as my niche. I understand that there are seasoning guildelines for loans such as FHA. So my question is, how are people flipping properties without satisfying the seasoning requirements? I've seen several "success stories" talking about so and so made so much money off of their first deal, "in just 5 hours of work!"
Here are my initial thoughts (feel free to correct me if I'm wrong):
1) Seasoning is only a requirement if conventional methods are used to finance the loan. For instance, if I find a property, and go to a bank to get a mortgage loan, I'm subject to the seasoning requirements. However, if I use private investors or hard money lenders, I can throw the seasoning requirements out the window.
2) They're done illegally.
Thanks for any and all advice!
Oops, sorry, I posted this in the wrong forum. I know I'm not supposed to do this, but I'm going to post in the CORRECT forum.
Sorry!
HI. Most of the flipping systems are fraud. However, it is not illegal to buy a home from someone and then sell it to someone else for more.
If you can do some fix up, or find a distressed seller to get equity, that's fine.
Seasoning only appies to a refinance, and has no effect on you selling the home to another buyer.
Some lenders will not finance a home at more than the last recorded purchase price until 12 months have passed. However, others will if there is documentation showing that the previous sale was not at market value, or if substantial improvements (gutting) have been made since.
Hope this helps.