Hey Guys. I am about to buy a house and live in it for 4-6 months while I fix it up and then sell. I want to be sure there is no seasoning issue maybe with the mortgage company or something, in which they would require me to have lived in the house for a certain amount of time (say 12 months) before selling it. Any advice out there?
Otherwise, how do they do it on “Flip That House?”
Some mortgage companys do require a certain time that you should live in a house. I believe in most cases it is a year. You might check with the loan officer and see what he/she says is required.
You could always get a Hard money lender but they usually only do up to 80 percent of the homes value but if there is room you can include some of the fix up cost in those typ of loans.
REGONZ
JUST CURIOUS BUT WHATS WRONG WITH LIVING IN THE HOUSE FOR A YEAR WHILE REHABBING? JUST ASKING BECAUSE THAT’S WHAT I PLAN ON DOING ON A HUD HOME THAT I’M TRYING TO PURCHASE AND HUD REQUIRES THAT OWNER OCCUPANTS LIVE IN THE PROPERTY FOR AT LEAST A YEARAND I DON’T WANT TO DO THAT IF I’M GOING TO BE LOOSING OUT. LET ME KNOW, THANKS.
There is nothing wrong with living in a home for a year while you rehab it as long is it meets the goals that you have for that particular investment. We are currently living in one for 2 years now while we rehab it while we also do other homes. We will make good money on it when we do sell it and will have no tax on the gains on this one.
First check to make sure you have no prepayment penalty. Some states don’t allow them anymore. As for living in the house, the mortgage company expects you to live in the house for a year, and if you later change your mind, they can’t really do anything about it. Never heard of anyone getting in trouble over that unless there’s some kind of foreclosure or outright fraud.
Also for tax purposes, living in a house for 4-6 months and then flipping it gets you into short term capital gains rate which is whatever your income tax bracket is which could be 25-31%. Living in it for a year gets you the long term gains rate which I think is around 15% and living it in for more than two years means you get to exclude 250k or 500k if married in gains.
DOES ANYBODY KNOW A FREE WEBSITE WHERE I CAN LOOK UP HOW MUCH A HOUSE WOULD BE WORTH AFTER I DO MY REHAB WORK? PLEASE LET ME KNOW IF YES, THANKS AND GOD BLESS!
unless you plan on doing just paint, carpet and other light work for a rehab and/or selling it under market, your timeframe of 4-6 months is highly optimistic. Just the selling process after you finish repairs could take that long.