I have heard that the lending requirerments have changed a bit in the past 2-5 years due to all the flipping of properties that have gone on in the past prior to that time.
What I have heard is that most lenders will not allow a person to flip a home in a 2-3 week period for a lot more money then the purchase it. Now a days lenders require much more documentation on flipping then they did in years past.
Can someone clear this up for me.
What time frame is considerd a flip from a lenders point of view?
What kinda documentation do you have to provide to a lender if you were to flip a property?
What length of time does a purchase and sale of a property is it not being considered a flip??
I tried to buy a 4-plex about a year ago. The seller bought it for $50,000 and had a silent second. The lender wouldn’t let me buy it for $90,000 because one year hadn’t passed. If he would have rehabbed the property then they wouldn’t have cared that 1 year hadn’t passed.
So it has been my experience that lenders want you to own it for at least one year if you are flipping with no rehabbing. If you are rehabbing then you will have receipts to prove why you’re selling it for much more than what you paid for it. SAVE YOUR RECEIPTS.
Less than 1 year
More than 1 year
This has been my experience, others may have different experiences.
Absolutely. In my case after the year passed which was about two months ago, the seller contacted me. I went through the property (again) and desided not to pursue the property. The 4-Plex brought in over $500 a month positive cash flow, but it was just a little to slummy. I have learned I only want nice properties, no ghetto trash properties.
If you still want to sell the property in July then definitely try selling it to the original buyer before you list it with a Realtor. If you already have a possible buyer than try and sell it directly to them and save yourself 6% in commissions.