The question has come up more then a few times about one of our posts. Here is the question:
“why some the purchaser of REO may not re-sell, record and additional convey document or transfer title to the property with 60days,”
The answers are simple: 1) Neighborhood stabilization 2) Prevent fraud.
1. Neighborhood stabilization attempts to keep properties from devaluation. too many homes sold at below market value brings the home neighborhood down. Plus seeing homes sold over and over again is not indicative of a stable neighborhood.
2. Flipping Properties, is not a problem. However, the Investor must take TITLE to the property. and not sell the property before he takes title. or a double closing.
Double closings, ( person A buys from the Bank and sells to Person B and closing both on at the same time. ) Chance are Person B must get a loan from ABC mortgage company. Well ABC mortgage company does a title search before closing and if the see that Person A does not Own the property, person B will not get a loan and not close. And person B will never find out why?
or contract assignments. In many states now contract assignments are allowed if all parties agree to the assignment. Well we know most REO Owned properties can not be assigned. In many cases must be purchased by Owner Occupants. Investors may buy REO properties once these properties have been on the market 60 days and in some instances only 10 days.
Now remember, the investor must show he has a loan qualification letter with the banks name, address and telephone number. Private lender financing must also show the name, address and telephone number of the private investor. Or a cash transaction must show the funds in a US bank in US dollars for the past 60 days.*
Again the final buyer’s mortgage company will do the title search to see if the seller OWNERS the property. If the seller does not own the property they are selling, the sale will not / or may not go through.
* Fraud is a challenge in our business. Too many ppl take wannabe Real Estate investment get rich quick without risk seminars. and they pay Big Dollars for these seminars. Flipping properties without taking title is potentially fraud.
Buying a distressed property, fixing up the property to bring its value up to current market expectations then reselling that property is Great and encouraged. This brings up neighborhood values. In most cases this takes 8 to 12 months of OWNERSHIP.
This is where a professional Realtor who knows the Real Estate market and working with a Real Estate attorney who knows the laws is to the advantage of the investor.
And many of those Get rich quick Real Estate investment seminars, the only one making money is the seminar company. The reason these ppl conduct seminars, is the on stage shrill can no longer make money selling real estate, so they teach seminars.
However, YES one can make money in real estate investing. UP market or Down market it does not matter. And YES like any business you do need YOUR money to start.
No money down Real Estate investing is not impossible, but not easy either.
Don’t forget to check our Real Estate Investing and Dealer Status post
Need help with your Real Estate Investing? Call me. I have over 15 years experience in RE investing.
I do not work only on a commission but my fees are simple. And you will be the Winner.
Good Luck every one.