Flippers Beware
Worth repeating:
I have already read some posts that discuss the 90 day moratorium for investment properties which means you must have possession of the property 90 days BEFORE your buyer can obtain FHA secured financing. BE SURE that your FHA appraisal in after the 90 day period. Remember that FHA appraisals are good for 6 months so if you pull the trigger too soon you may be setting on it for SIX MORE MONTHS!
Also another note on flipping worth mentioning is that FanniMae has reinstated its 6 MONTH anti flip policy that prevents investors from flipping a property for more that 120% of the purchase price for 120 days after possession. THIS IS RECORDED WITHIN THE DEED.
Flipping is still very lucrative but one must watch for pitfalls such as the ones listed above and the legal ones as well. HAPPY SELLING!
I have been in the proceess of getting a home ready to sell the past three weeks. When I bought it I was hoping to have it on the market next week. Things just take longer than I usually plan and of course it costs more to make the necessary upgrades than I had planned. I do some of the demolition work and help out a bit. However, I am not a finish carpenter and don't pretend or try to be. I contract out the work that I know I cannot do professionally. .
I recently had a friend say to me, "I have been reading about flipping a house and have been reading and learning everything possible." I asked him if he was working with a realtor and he said no. I advised him to give me a call and he said he would. I see him every week and yet he has yet to call me.
It is so easy to walk into a vacant house and spot a home that someone has bought and is trying to flip. Especially if it is someone who is not a professional remodeler. Typically these homes are in need of repair to the repair. Recently I showed a home to a client where the attempted updates to the kitchen included a two piece granite top that was at least half an inch off at the seam. They had also attempted to update the kitchen without installing a dishwasher.
Often these "get rich quick flippers" also will not bother getting a home inspection. So when they try to sell the home things such as electrical problems or even worse mold problems raise their ugly head and the "flipper" ends up losing money.
Once again applying the Golden Rule is the only way to "flip" a home. If you fix it up so that you want to live in it, you are happy to pay the price you are asking and you are willing to buy a home warranty for the home then it will sell quickly. If you made a little money during the project consider yourself fortunate. Odds are the first home you flip will make little or no money however. So ask yourself, "Am I patient enough to learn from the process and willing to do some real soul searching before I do it again.
Just one last word about flipping. If you are trying to buy a bank owned home be ready to wait and wait and wait. Be aware also that the bank may be looking at more than one potential buyer and that if your bid is not high enough you may lose out on a home after waiting for weeks and even possibly months.
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