Question on a possible flip... (loan, property, bank, guidelines)

[Brabus42]

I'm trying to understand the current "seasoning" for loans.

If I purchase a short sale for less then 20% of what market value (this is Az and the offer was submitted before our housing market took off again) and then want to turn around and sell it what are the rules for FHA or conventional buyer? I understand the section on showing receipts to justify increase but I won't have any of that. I'm just getting a great deal on the purchase which is below 20% of what homes in the area are going for.

If I am selling for say 35% more then what I paid, and can have two independent appraisals and inspections from the lenders choice of companies, what do I need to know?

Appreciate any info you can give me.

Thanks

[Captain Bill]

Originally Posted by Brabus42

I'm trying to understand the current "seasoning" for loans.

If I purchase a short sale for less then 20% of what market value (this is Az and the offer was submitted before our housing market took off again) and then want to turn around and sell it what are the rules for FHA or conventional buyer? I understand the section on showing receipts to justify increase but I won't have any of that. I'm just getting a great deal on the purchase which is below 20% of what homes in the area are going for.

If I am selling for say 35% more then what I paid, and can have two independent appraisals and inspections from the lenders choice of companies, what do I need to know?

Appreciate any info you can give me.

Thanks

FHA Waives Anti-Flipping Rule Through Year-End to Speed REO Sales

HUDNo.11-292page

FHA will keep funding flips | Inman News

[Zippyman]

FHA guidelines are minimum standards, expect the buyers lender to ask for receipts for the work you did & don't bank on the appraiser to agree with your opinion of value unless you can provide multiple model-match comps within a mile of your property, under six months old. Or, sell it without an appraisal contingency to a qualified buyer who actually can come up with the difference in cash, if the house doesn't appraise.

You may have more luck renting the property for a year or two, to give the "comps" time to catch up with reality. If there are still "comps" closing at 20-30% under real market value, all you can do is wait. I've seen several "insider" deals in the neighborhoods I watch that weren't really "open market" deals, but they still affect the value of your property.