Title Seasoning?!?
REHABBERS! Do you guys and girls have any trouble selling a newly rehabbed property if you have only owned it for 3-6 months?
I am going to start rehab a property in the next 2 weeks and I am wondering about my exit strategy... Do any of you pros out there have trouble selling without owning it for a year? Do mortgage companies have a problem with this? I know that there are "anti-flipping" movements out there by mortgage lenders, but never dealt with them... Any comments?!?
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For months I have heard everyone on this site complaining of title seasoning but every mortgage broker and banker I talked to didn't even know the term....until recently.
Long story short after I determined what I did differently. This property was for sale by owner and to a poor credit buyer. All of my other properties were listed with a realtor and they brought good buyers that I never needed to worry about.
I since have found out that if you have good credit buyer and can qualify for an A paper loan, then you won't have a problem with title seasoning. It is only when you are dealing with B/C lenders that are going to look over the file closer.
Thank you much for your input!
It's appreciated!
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My deal just fell through because of title seasoning issue. I have held the property for less than 6 months and the property was under contract for a month before the lender pulled the plug because of title seasoning issues. I have to start the whole process again. I am now on the lookout for a lender who does not have title seasoning issues. Anybody know of any in the NJ area.
Thanks
Hello all,
Bypass title seasoning altogether by selling your rehabbed properties like many other rehabbers, using owner financing, and selling the new note at closing for cash.
When you rehab property, if you are doing it right, you are bringing it up to neighborhood standards, no more and no less. So how do you usually compete to make your property move faster? YOU REDUCE PRICE.
We all know seller financed paper, whether sold at closing, or paper that has been seasoned for a number of months or years is bought at a discount. This discount and your normal price reduction strategy constitutes a wash, essentially.
However, as a rehabber, with owner financing, you attract a larger buyer pool, generate more interest, and bypass title seasoning and the need to hold back a seller second (in most cases), and sell your property faster, putting the profit in your pocket.
Hope this helps, best, Dave
Dave do you know of any Reputable note Brokers
who perform on time and do what they say ?
Well I am not sure if this can be posted or not, but you may try Regions http://www.Mortgage.com. We just refinanced with them and took cash out on a property we owned less than 3 months.
Notes is one exit strategy that works however you can also just c/o (cash out) refi your rehab loan to a conventional loan at 95% - 100% LTV 2 to 5 yr ARM on an interest only payment and then just sell it owner financing or lease option to buy - make their monthly paments higher than your interest only payment so you get a little cash flow and then just sell it to them a year later to free yourself of it totally. This method works great!
I recently ran into this seasoning problem on an FHA deal. They did two appraisals and it closed. Took a few weeks longer, but it did close
Quote:
On 2005-03-01 12:18, MissHelen wrote:
I recently ran into this seasoning problem on an FHA deal. They did two appraisals and it closed. Took a few weeks longer, but it did close
So are you saying that they appraised prior to fix up and then again after fix up? Or, did they just need two seperate to prove the value of the property after fix up?
Wondering, so that i do not get messed up on my first that i am in process of purchasing.