All Forum Posts by: Laura R.

We just sold a flip in a flood plain, so I guess I would say it depends. Our property was in a flood plain because it bordered a nice little lake with a decent view from the house. The buyer was willing to buy the flood insurance in this case because of the location. I have seen houses in flood plains with basically dry creeks in the back of the property, which would mean having to pay extra for the insurance with not much benefit.

What I was able to find out about flood insurance, though, is that the entire year's premium is due in a lump sum up front, but it is transferrable after I believe 60 days. If you bought the flood insurance and offered to transfer it to the buyer, it might work out okay if you get the property at a low enough price. Call around and find out what the flood insurance would be and factor that into your decision. I can say it is pretty expensive.

Also, double check the FEMA flood map. The agents I spoke to said they have made a lot of changes to the maps recently, and what may have been in a flood plain before may not be now. Although I got the impression that the maps were redrawn to include more properties, it is still worth checking to make sure.

We just sold a flip to an FHA buyer. The contract cannot be written prior to 90 days from the date of recording of the deed on your purchase. There was a gray area here for us because the guidelines actually state the date the property was acquired, and the sale ended up going through after an appeal to FHA, but I will def be counting from the date of the deed recording and not our closing date on future FHA transactions.

Also, you will be required to pay for a separate appraisal as the seller. This ran us approx $500.00. The guidelines state:

"A lender must obtain a second appraisal by another appraiser if:

the resale date of a property is between 91 and 180 days following the acquisition of the property by the seller, and the resale price is 100% or more over the price paid by the seller when the property was acquired. The cost of the second appraisal may not be charged to the borrower."

Oh, didn't realize this was an older post, lol! Glad you were able to keep going. We have learned A LOT though this process and hope to be where you are by next year, closing on 3rd or more. We actually assembled a pretty decent group of subs for moving forward, but the problem now is just finding the next deal. It took us months and 8 offers to find this place, where the numbers worked AND we could get through the process of competing and actually getting the winning offer. My area is a bit of a hotbed for rehabbers, so there may be 10-15+ offers on a place if it looks good and is in the right area. Wishing you continued success! 

Great job Tim! It's eerily similar to my first rehab (a dated brick rancher), which will close in 3 weeks. We closed on the purchase side on 3/6 for. We got the contract a couple of weeks ago, but they wanted to close in Sept. Had almost an identical amount budgeted for the rehab and almost the identical amount actually spent. We also had 6000 budgeted for the roof and didn't think we were going to redo the windows but ended up doing them. I used the identical tile in the hall bath and the same cabinet except in white and subway tiles for the shower. Kitchen looks almost the same. Also figured out about halfway through that hiring out more work is def the way to go, but so glad we were hands on for this first job. 

Best of luck to you, place looks amazing! 

Thanks everyone for the great responses! You have confirmed our initial gut reaction, that they do not need this info, but we also wanted to make sure this was not something that just comes up occasionally and it would look like we were hiding something if I didn't comply. 

I am guessing that either the inspector brought it up or the person saw the original price we paid on Zillow and thinks there is a lot of "meat on the bone" to renegotiate perhaps? She is actually asking that repairs be made and not be offered a cash discount for the items, but probably it is because she has things like remove poison ivy from back yard and hang some fallen insulation on her request list, which are not going to add up to much. She even asked that we pay her inspector to come back and recheck the items, so something seems funny about all of this. There is moisture in the crawl space, though, that needs to be addressed, and that is the one area where some negotiating may come up, so wondering if she is getting her ducks in a row for that? 

Anyway, thanks again! Will proceed with the repair items and nothing but the names of the contractors for HVAC, driveway, etc., because that seems like a legitimate request. I like the idea of providing that at closing and not beforehand. Thanks! 

Yes, that was my thought as well - names in case there is an issue down the road, but no receipts. Work is permitted, so should be no issues there. 

In the back of my mind, there is a little voice that is saying this request may be a red flag as a way out? Buyer pays full price the first weekend the home is on the market and now is having 2nd thoughts?  IDK, just have a feeling this will end up being a point of contention. Guess will just have to wait and see. 

HI Everyone,

We just finished our first flip and got a full price offer (with some closing allowances) the first weekend we went to market! The buyer has just completed the inspection and we received the report. There were about 10 mostly minor issues. Also, though, there was a request at the bottom of the addendum that we provide all contractors names and receipts for all renovations and repairs done during the time that we have owned the home. 

My realtor says he has occasionally seen this at the time the contract is written, but not as part of an inspection report, that the inspection is intended to identify major defects, this is not a major defect, and could be crossed off if we desire. We have no problem providing the names of all the major contractors we used during the rehab: driveway installer, granite company, HVAC contractor, drywall company, etc., but I do not think she needs all the receipts or needs to know the cost of everything we have done. 

She is also requesting a receipt for any of the repairs done as a result of the inspection, which I think is pretty standard and we will do. 

This is our first flip and was a bit surprised by her request. I know the appraiser may ask if the asking price is way above sales price, but wasn't expecting this from the buyer. My question is: Is this a common request of you guys. If you have seen this, do you comply and provide the buyer all of your receipts for the work you have done? 

I want to do what is typically done by most flippers. If this is the norm, then we will comply, just haven't seen anyone mention this or thought this would be a request. We are not trying to hide anything. Husband is a class A licensed contractor, and all major work was done by licensed contractors. 

We look at and will consider most anything and everything in the Richmond metro area where the numbers work and we feel fairly safe coming and going, essentially what everyone else is looking for, lol! Northside, Lakeside, Maymont area, some areas of south side near Westover Hills, county suburbs, and tri-cities, although you have to understand the tri-cities markets to do well there. Not to keen on areas off of Williamsburg Road, Jeff Davis Hwy, most other areas of south side, especially around the VA Hospital area.

Yes, home owners can hire whomever they need, etc. The distinction is when you are doing repairs and a 3rd party will be occupying the house. 

The lawyer said there are 1000s of transactions going on where these rules are not being followed and there are probably gray ares if someone wants to challenge, but thankfully my husband had the years of experience and we had the assets required to make the class A licensing possible with a just a few prep classes. 

Just heard back from the lawyer, so thought I would update this thread in case others are searching for an answer to this in the future.

The lawyer confirmed what the state was telling me, which is: If you want to buy properties to fix and flip or rent out in the state of Virginia, you, the owner/investor/landlord, must be a contractor.