How many of you have been out house hunting and seen some bank owned properties that look like this:
They are usually the ones that the "creative" REO agent describes with terms like " Needs a little TLC" or "Handyman's Delight". In reality, the description should be "Bring your own hand sanitizer. This ones a dump".
The problem is that if an investor buys that lil gem,fixes it up and sell it, he's labeled as a "flipper". In today's market that's equivalent to sporting a scarlet letter A from years past. The punishment for such a heinous act is that, as a flipper, you aren't allowed to re-sell that renewed, improved property for 90 days. If your reaction is ...HUUUHHHHHHH???... you're not alone.Luckily, FHA has come to its senses..well at least on this point. Starting 2/1/2010, and with a couple of minor exceptions, a flipper can buy, fix up, and re-sell that property to you immediately. If you qualify, you can get an FHA loan to buy it. So instead of needing some "elbow grease" on the above property, you can now put an offer in on something like this:
Several months ago when it originally came to light,I addressed this problem in a previous blog post:
Why We Need More Investors In This Market
Thank you for posting this. It's the first time Im hearing about it. Im off to look into it more.
They should have allowed investors in from day 1.
I totally agree. I found it odd that the one time we needed investors the most, they were all but shut out of the market.
As a mortgage consultant, a few of our lenders are requiring a second appraisal even after the 90 day period. Strange crazy days!