In 2003, FHA instituted a 90-day waiting period for resale on homes purchased by investors. This meant that when a home was purchased it had to be owned by the current owner for 90 days or more before a buyer could come in and use an FHA or VA loan to buy it. This measure was put in place to protect consumers against predatory lending.
FHA recently announced that it had agreed to temporarily waive the 90-day waiting period for home resales. This is an effort to allow investors to pick up foreclosure inventory and resale it to owner occupants using FHA and VA financing. While this is not a huge thing in some investors minds because many people will need more than 90 days to rehab a foreclosure anyway it is good to see the government considering investors and their needs.
Perhaps this trend will continue and more things will work in our favor! I know I was excited about this because a lot of the properties my students are flipping are owned a lot less than 90 days when they get flipped. You might be wondering how a property can get purchased by an investor, rehabbed sold and closed in less than 90 days.
This is actually pretty simple. I will give you two tips here to make that happen:
1. I have a lot of students that are buying properties with 30 day plus escrow periods and they are getting permission to work in those properties before closing. Some of them are actually closing on their properties with their rehab either done or very close to being done.
2. Traditional rehabbers do way too much work and spend far too much money. They end up having to price their property at a price that it won’t sell at. Less rehab equals a lower price. The lower the price the more people there are that can qualify for the payment and the home!
Don’t make investing harder than it needs to be.
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