Virtually everyone interested in real estate is aware that current market conditions presents more money making opportunities than ever before in our lifetimes.
Buying and selling (flipping) property today can make you very wealthy.
Sellers are everywhere and are very eager to accept discounted offers from anyone! You also know you can attract buyers.
So with this knowledge you decide to jump into the real estate flipping business.
Who wouldn't, considering even a minimal size deal can put $10,000 into your bank account! NOT SO FAST! There is one issue that every investor will come to grips with in house flip transactions and many don't find out till they're at the closing table.
It's called the title seasoning issue.
This problem has ruined many Investor business plans and a many have lost thousands of dollars to this ugly enemy.
The title seasoning issue is a policy that has been adopted by mortgage lenders and banks throughout the nation.
It means the bank will not finance the buyer of a property that is being sold by anyone that has not had title to the property for a minimum period of time.
Some lenders want to see 30 days, some 60 and FHA loans require 90 days of title seasoning.
As the investor flipping houses you will have a sale contract to purchase the property and also a contract to sell the property with the end buyer.
Ultimately, you want to buy the property on the same day that you sell it to the end buyer.
This means you'll first close the front side of the deal and title will pass to you.
Then you'll close the back side of the deal and transfer title to the end buyer and the difference between the two sale prices is your profit spread.
However, as soon as the lender for the end buyer notices that you have only had title to the property for a day (or a week or month...
) they will kill the deal.
The profit you thought you would be depositing in the bank has vanished! Quite possibly you invested money getting the deal to the point of closing which you were expecting back and that also gone! Not a good day! Lenders have adopted title seasoning requirements in the hopes of avoiding being taken advantage of.
Many unscrupulous investors will structure flip transactions to fellow investors, close them, pull the cash out of the middle and run.
The buyer never makes a payment and the lender loses.
This is flat out fraud and unfortunately happens a lot more than we would believe and we all pay the price.
Mortgage industry lobbyists have tried to make title seasoning requirements law only to fail.
In response to the failed attempts lenders have adopted their own title seasoning policy to stem the problem.
When armed with the financing mechanism necessary to fund the entire flip transaction, you'll never deal with the dreaded title seasoning issue again.
Flipping houses will seem, well, easy.
Even after the market has once again picked up.
Buying and selling (flipping) property today can make you very wealthy.
Sellers are everywhere and are very eager to accept discounted offers from anyone! You also know you can attract buyers.
So with this knowledge you decide to jump into the real estate flipping business.
Who wouldn't, considering even a minimal size deal can put $10,000 into your bank account! NOT SO FAST! There is one issue that every investor will come to grips with in house flip transactions and many don't find out till they're at the closing table.
It's called the title seasoning issue.
This problem has ruined many Investor business plans and a many have lost thousands of dollars to this ugly enemy.
The title seasoning issue is a policy that has been adopted by mortgage lenders and banks throughout the nation.
It means the bank will not finance the buyer of a property that is being sold by anyone that has not had title to the property for a minimum period of time.
Some lenders want to see 30 days, some 60 and FHA loans require 90 days of title seasoning.
As the investor flipping houses you will have a sale contract to purchase the property and also a contract to sell the property with the end buyer.
Ultimately, you want to buy the property on the same day that you sell it to the end buyer.
This means you'll first close the front side of the deal and title will pass to you.
Then you'll close the back side of the deal and transfer title to the end buyer and the difference between the two sale prices is your profit spread.
However, as soon as the lender for the end buyer notices that you have only had title to the property for a day (or a week or month...
) they will kill the deal.
The profit you thought you would be depositing in the bank has vanished! Quite possibly you invested money getting the deal to the point of closing which you were expecting back and that also gone! Not a good day! Lenders have adopted title seasoning requirements in the hopes of avoiding being taken advantage of.
Many unscrupulous investors will structure flip transactions to fellow investors, close them, pull the cash out of the middle and run.
The buyer never makes a payment and the lender loses.
This is flat out fraud and unfortunately happens a lot more than we would believe and we all pay the price.
Mortgage industry lobbyists have tried to make title seasoning requirements law only to fail.
In response to the failed attempts lenders have adopted their own title seasoning policy to stem the problem.
When armed with the financing mechanism necessary to fund the entire flip transaction, you'll never deal with the dreaded title seasoning issue again.
Flipping houses will seem, well, easy.
Even after the market has once again picked up.
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