All Forum Posts by: Daniel Fisher

I haven't done many sales to VA buyers (just because VA buyers make up a relatively small buying segment), so I don't know how VA underwriters do things. So, I can't speak to that...

But, I don't believe that FHA and conventional underwriters will consider a seller-initiated appraisal in lieu of that previous purchase price when evaluating flip criteria.

Regardless, being successful at any of these things seems unlikely, and I wouldn't suggest hinging your entire resale strategy on the hope that an underwriter is willing to be lenient or accept documentation other than the previous purchase price. While it may work occasionally, far more often it won't, and you'll be left holding a property without a plan.

If I were you, I'd either:

1. Wholesale the property to a cash buyer;
2. Buy, hold and wait 12 months to resell.

J Scott have you gotten an appraisal in a case like this and tried this approach?

I too would not hinge my entire resale strategy on hope. But I'm wondering if there are people that have done this and didn't have success with it. Or is it that nobody has really tried this method?

At any rate, if I do resell at $140K rather than $185K I still stand to make a great profit. Or doesn't it work to just drop the the price by $45K if the underwriter balks about the sale price?

Also, if say I do wholesale this to another flipper, won't he run into the same issue?

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Here is the topic http://www.biggerpockets.com/forums/311/topics/93444-selling-flip-with-significant-price-increase-with-little-work-done

So a solution would be to offer the seller more money? So I can sell at market value.

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I started a thread about trying to find ways to sell a house with significant increase over purchase price and I just discovered it was locked. I was hoping some of the questions I asked would get answered yet. Can someone explain why the topic got locked?
Thanks

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Originally posted by Jennifer Gibbs:

They don't give a clear defined idea how they get their data except that they get it from various sources, filter it, try to scrub out all the REO's, etc. They give you multiple layers to sort your data, such as vacant, vacant + high equity. They define high equity as no loan on the property in 15+years. Now, vacant is defined as not occupied or abandoned. This is where it could get tricky (but still profitable). Not occupied could just be vacant due to death, eviction, a divorce, or someone simply moving. The person could call and not be interested in selling THAT property but perhaps another.

The fact that they scrub REO's certainly is a plus. Almost all vacant properties in my area are properties that are that have been through the sheriff sale process but the bank hasn't put it on the market yet.
I have yet to come up with a way to buy these properties from the bank. Other than wait until they come on the market...

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Was he saying the overall gross is 3x market? I would imagine that was the case and it is feasible because of his extra expenses.
For instance he can add bedrooms in areas that would commonly be utilized differently in a SFR therefore he is adding rentable area.

I own a house that is rented by the room but my biggest challenge is to keep it full. I am still trying different things to avoid the high turnover and vacancy rates.

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I have heard of a somewhat similar situation where the buyer had VA financing. The rehabber was required to get an appraisal by his HML and the house "prerehab" appraised for significantly more than purchase price. The VA underwriter used that appraisal as the FMV of the house before rehab.
My question is, do FHA FNMA USDA ect use different guidelines than the VA?

J Scott do you get appraisals of your rehabs? Have you tried this approach?

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Originally posted by J Scott:

Btw, if you don't make a cash sale, I don't know any reliable way you'll be able to sell anywhere near market value to an FHA or conventionally financed buyer.

Lenders won't take into account a distressed situation? Or that the house didn't get MLS exposure?
Their are very good comps to support the stated ARV.

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I assume anything originating out of the country is a scam.

Also, there is no way a foreigner with that amount of capitol will entrust a total stranger.

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David Beard

Originally posted by David Beard:

Daniel Fisher - yeah, a quick financeable sale is pretty much out of the question, even with a local bank or credit union portfolio deal. If you have a track record, you could potentially solicit a private lender for an 18 mth note to bridge you to the 12 mth title seasoning you'll likely need. Might have to offer 12-15% to get the necessary term. Might find someone right here on BP. With as much spread as you seem to be working with, it's still a grand slam. Could put a carefully selected short-term renter in there for 6 mths to cover overhead, then do your repairs in the winter and list it next spring, targeting a signed contract at the 12-mth mark.

I like this suggestion but I was wondering if their is any way to get around it if I sell much sooner.

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Originally posted by Phil Z.:

I think you might be ok under $140k (200%).

But why don't you just wholesale it for $100k?

Why should I sell for $140K which is substantially below market value? Shouldn't I be trying to maximize my profits?

I may wholesale it but won't the next guy have the same issues if I assign the contract?

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All Forum Posts by: Daniel Fisher

Daniel Fisher has started 7 posts and replied 89 times.

Post: Selling flip with significant price increase with little work done.

Post: I started a topic and now it is locked. What happened?

Post: I started a topic and now it is locked. What happened?

Post: Find vacant homes now

Post: Guru talking about buy and hold, renting rooms to gov. agencies for handicapped at 3 X market rents?

Post: Selling flip with significant price increase with little work done.

Post: Selling flip with significant price increase with little work done.

Post: Is this a Scam?

Post: Selling flip with significant price increase with little work done.

Post: Selling flip with significant price increase with little work done.