Easiest way to flip a home.... - Posted by Flipping guy

Posted by Tommy FL on April 19, 2008 at 14:39:52:

What type of loans are your buyers using to avoid the seasoning issue on flips? Obviously not end users needing 95-97% financing because the guidliness for those loans require seasoning. Just trying to understand how this is done?
Thank you
Tommy

Easiest way to flip a home… - Posted by Flipping guy

Posted by Flipping guy on April 18, 2008 at 13:13:52:

I know, I know, this is a rookie question, but I’m not sure about this. I have a lady who’s home I might try to flip. She is walking away and probably owes too much on it to try, but I’m new at wholesaling and figure I would give it a shot. She doesn’t care what I do as she is leaving to a new home.

I won’t worry about the getting the deed for now b/c like I said, I don’t know if there is enough room to make it work. But, it will be a lesson that I need to learn, etc.

So, with that said, what is the easiest way to flip a home? When you put the house under contract with the option to assign it to someone else, do you have the new buyer pay you the difference via a cashier’s check and give them the contract?

Or, do you fill out a new contract with him and close both the same day? I have spoken with numerous title companies in my area and they have all told me flips of this nature are illegal (Missouri) and they won’t do them. Thus, I’m a little perplexed at the approach everyone takes to do this.

Any help / advice would be appreciated. Thanks.

Andy

Re: Easiest way to flip a home… - Posted by Natalie-VA

Posted by Natalie-VA on April 22, 2008 at 11:15:58:

“I have spoken with numerous title companies in my area and they have all told me flips of this nature are illegal (Missouri) and they won’t do them.”

I don’t know Missouri laws, but I’m having trouble with this statement. I think you’re probably talking to people at the title companies that don’t have a clue. I don’t see anything inherently illegal with buying and selling a house in the same day. There are other things that go along with this that can be illegal, like defrauding a lender, but the simple act of buying and selling is not. I would try and talk with someone at these title companies that really knows what’s going on and see if they can help you accomplish your goals. Maybe talk with some people at your local REI club and see how they do it.

–Natalie

Re: Easiest way to flip a home… - Posted by Chad (MD)

Posted by Chad (MD) on April 19, 2008 at 13:36:57:

What are you trying to flip? If the house has no equity it’s not a deal – even for free.

I understand you want to practice, but first you have to learn the mechanics of the flip. Next, how to identify a good deal.

Re: Easiest way to flip a home… - Posted by srec

Posted by srec on April 18, 2008 at 14:30:58:

Andy,

There’s a lot to know and a lot to learn.

  1. You don’t need to get the deed . . . in fact, just drop that from your vocabulary because it can lead to many bad things.
  2. If the homeowner is upside down, you’re going to need to learn how to do a short sale to buy the property.

With property values projected to drop 20-40 percent (see Businessweek 2/11), opportunities to flip houses using an assignment will be rare. Why? No equity.

Still, there’s plenty of money to made in short sales for which you can either buy and hold or flip. Avoid those companies that promote the use of land trust as a means to facilitate short sale transactions. Look for those companies that provide information on using the option contract as a method to conduct transparent transactions.

Finally, this business is fun because of the endless problem solving it requires and the potential for large pay days - but it’s lots of work.

Re: Easiest way to flip a home… - Posted by jimi

Posted by jimi on April 19, 2008 at 04:00:58:

Option, land trust, purchase contract … it doesn’t matter. It ain’t what you do it’s the way that you do it. The issue is lender requirements around seasoning and fraudulent flipping(inflating values to secure a loan). There’s no magic bullet. I agree that transparency helps. Double closings will increase so bridge financing is the way to go if you need to flip it.

jimi