Posted by jasonrei on September 15, 2004 at 12:05:07:
Well, right now I have an agent selling all my houses. When the agent finds a buyer, they get them qualified thru a local lender that only has a 3 month seasoning requirement.
When I sold houses FSBO or with the help of buyer’s agents, I told them up front that I’d only owned the house X months, and that many lenders wouldn’t do that kind of deal. Many submitted offers anyway, I’d call the underwriter, and sure enough the deal would be no-go. I’d do this before accepting any offer. That’s one of the reasons I stopped listing my houses on MLS. 65-85% of the prospective buyers had lenders with stiff seasoning requirements, and it wasn’t worth following up with 5-6 underwriters per house. I have too many houses on the market to be doing that kind of work.
I really don’t even work with buyers directly anymore. It just takes too much of my time, unless they have CASH which, surprisingly, many do! Anyway, I do have a couple of loan officers that I would direct prospects to. If my real estate agent were to kick the bucket tomorrow, I have to have a Plan B, right?
Are there any laws that dictate how long you need to own a property youa re rehabbing before selling it? What are the seasoning issues surrounding financing if I buy a property, rehab and sell it within a few months? Will buyers have trouble getting traditional financing?
I am doing business in Maryland…Baltimore City or Baltimore Couty.
Posted by investor on September 16, 2004 at 18:11:31:
Seasoning really isn’t as huge a problem as it’s made out to be, especially when you choose to seller finance your buyers. When you do this, you become the bank and effectively create your own criteria.
The trick is to properly structure the note on the front end, so that you can sell it at closing for top dollar and cash out.
I work with investors that can not only help you structure these deals properly, but they also buy then from you at closing. Your buyer gets the property, you get to cash out and walk away.
Email me your situation and I’ll get back with you as soon as possible with more info.
Posted by LeasePurchase on September 15, 2004 at 12:09:58:
Seasoning is a Lender issue. Some lenders have programs for Non-Owner Occupied Loans or Investor Loans that do not requires seasoning. Of course there are usually higher requirements, fees and interest charges for those types of programs.
I’ll bet that other investors in your area know which lenders will do that. If you attend a local REI Club you may find some of those Investors or a Local Lender trolling for business.
Show where owner-finance makes sense - Posted by jasonrei
Posted by jasonrei on September 17, 2004 at 01:13:00:
looseintern, you post this a lot. I have considered doing what you suggest, but I have NEVER seen where it is preferable to selling the traditional route.
I’d like to see a hypothetical scenario where seller financing is preferable to just cashing out. Please post specifics on a make-believe deal, or maybe one you actually closed.