Flip issue

[Chad Mellentine]

I bought a house on a private contract in March for $60k, we had very little rehab and placed the home back on the market 3 weeks later. We had 3 offers in 24 hours and accepted a $99,500 conventional buyer with 10% down. We were to close May 4th last Friday, but they are now concerned about value because the home was bought privately for $60k in March. They are telling me that the Private Mortgage Insurance (PMI) is concerned about the flip/profit of such a short sale. What are my options? We went with the conventional because FHA is so difficult to work with and now this has come up.

Thank you
Chad

[Monica Breckenridge]

I haven't had any problems with re-selling a property immediately, but I also do rehab the property and explain to the buyers lender that I bought the property on a distress sale. Always keep all documentation and receipts of all improvements in case there is an issue. We've had sometimes 2 appraisals ordered. You should pay for the 2nd appraisal for the buyer. If all this still doesn't work you can see if the buyers will find a new lender that doesn't have issues with the closing. Or you may just need to close after day 90.

I don't like to lease option my houses for short term , because if for some reason the buyers loan doesn't go through they now have lived in the property and may damage it. Plus you may have to go through an eviction if they don't get out and the sale doesn't go through. My husband and I prefer to just put the house back active if the first buyer can't pull it off. We've had too many bad experiences. Unfortunately it takes a bad experience sometimes to learn the ins and outs of this business. Thank goodness I've never lost money on a single deal. And Thank goodness for this site to learn from other people's experiences.