Property Flipping

By
Home Inspector with 203kOnLine.com, covering California & most other states S0289

Big News

HUD has just extended the waiver of the 90 day seasoning for REOs being sold to FHA customers. They have extened it to May 10th 2010. That means you can sell an REO to an FHA borrower immediately. No waiting the 90 days.. sounds like a challenge. This includes the 203b and 203k.

Property Flipping has been frowned on and considered illegal by HUD for quite a while. I remember having them in my office once years ago telling me just that. I had purchased a property at a wholesale price, and sold it a few days later for a nice profit... they lectured me on how that was illegal. I then suggested that I had a grocery store and purchased bread at a wholesale price, put a markup on that bread and resold it later that same day to achieve my profit. The fact was that the property I sold, without doing anything to it, was sold under market by me as well. I finally was able to convence them what I had done was normal in the course of real estate business. I never heard from them again so I guess they agreed.

Posted by

Mike Young, 203k Team Leader    Mike ready for your 203k order

With offices coast to coast and HQ now at PMB 168, 5055 Business Center Drive, Suite 108 Fairfield, CA 94534 1.707.812.7668. We have fourteen offices in CA covering both CA states, NorCAL and SoCAL where we can cover the entire state.

To learn more about the FHA 203k loan program go to www.203kOnLine.com. To contact us for a consultation please go to www.my203kconsultant.com and "order a consultation". If you like what you see here please take a look at Another blog by Mike Young in Spanish and other languages. Got a 203k porject giving you "fits" contact Mark from NV at www.203k911.com, is having more fun with this new site than anyone should. If you are looking for a quality 203k software for ease of underwriting and to help lenders and consultants provide quality service and reports to their clients.

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Rainmaker
1,390,942
Donna Harris
Donna Homes, PLR - Austin, TX
Realtor, CDPE & ASP - Hill Country Lakeway Austin

I got the same notice this morning.  It needs to have a permanent extension.  If it's a bank trying to resell a foreclosure, they should always have the right to get rid of it without waiting the 90 days.

May 19, 2009 07:29 AM #1
Rainer
44,190
Ron Tiller
Star Referral - Grand rapids MI - Grand Rapids, MI

Love your story from the past. Flipping indeed. You called their bluff and they backed down. Good job.

May 19, 2009 07:38 AM #2
Rainmaker
895,372
Michael Setunsky
Michael's Commercial LLC - Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Mike, the extension should help out a lot of people get FHA loans. I haven't heard that flipping a property is illegal. In the past the buyer may not have been able to get an FHA loan, but could have pursued alternative financing.

May 19, 2009 08:09 AM #3
Rainmaker
439,900
Mike Young
203kOnLine.com, covering California & most other states - Fairfield, CA
FHA 203k Consultant 707-812-7668

Donna, I agree. You have a problem you should be able to get rid of that problem ASAP.

Ron, I was merely pointing out a flaw in their thought process... ha.

Ron and Mike, Flipping properties was considered illegal if we buy and sell for a profit without adding any value to the property according to the IG and the FBI years ago. Don't know if they still feel that way. When you purchase and fix up then sell that isn't considered flipping though some TV shows would like to call it that.

Thanks for commenting. I appreciate it.

May 19, 2009 04:06 PM #4
Rainmaker
251,847
Robert Machado
HomePointe Property Management, CRMC - Sacramento, CA
CPM MPM - Property Manager and Property Management - Sacramento Area

That is good news.  I hope it continues as well.

May 19, 2009 06:27 PM #5
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Rainmaker
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Mike Young

FHA 203k Consultant 707-812-7668
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