I am looking at a bank owned property to flip.
Is it possible to get the bank that owns the property to lend you the money to buy and fix up for short term with the expectation of flipping?
Would they be more inclined to work with you so they can get the property off the books?
Sorry if newbie question just starting out.
You need to run your numbers to establish what you can reasonably sell the property for once you acquire it. That will give you the amount you will need to purchase it for to fit within your business plan. make sure not to overlook all of the additional costs, ie commissions, title fees, holding costs, etc… The bank who holds the note will certainly finance you if you qualify for a loan but don’t be silly and ask the REO dept if they will fund the loan. You’ll need to go to the loan orignation department. Having the bank who owns the property give you the loan to purchase it from them has no bearing on getting a better deal. As far as funds for rehab, research FHA 203K rehab loans. Talk to a local lender.
Thx was just wondering if you would get a better financing deal thru the bank that has property in foclosure.
It really depends on the bank. Some offer financing on their own properties - some don’t want to have anything to do with it LOL!
Since it is listed with a realtor, most likely - call and ask them if the bank is willing to do the financing with you. If they understand that you will be fixing and selling, they may not work with you - as banks lose money on those short fix and flip mortgages, especially if they have not sold your loan to a 3rd party.
They may have a seasoning clause in place that you cannot sell the property for X number of months after you buy, or set a price ceiling on a faster sell. Make sure you find all of this out before you buy.
Most banks would prefer not to finance their REO sales. They want to move the property/risk off of their books and by financing the property they do not accomplish this. They end up with yet another loan on a property that has already failed and cost them money. This is not to say it is impossible, if the bank is desperate enough they may offer financing, but you won’t get the best price if the bank is going to carry the note.
I think that it’s the owner of a property that has failed. If you can turn that property around, they can make money with a new mortgage. You can always rent the propertry out until the seasoning is up. Then you can sell it.