I have a duplex I bought 4 months ago. I bought for $77K and I have a contract for $120K. Appraisal shows $136K. Buyer is OO, more than 700 middle score and wants 100% LTV. Banks are giving a hard time to fund this loan. Less than one year ago this wasn’t an issue. I’m trying with banks that ussually do flips.
Are banks avoiding seasonal? Any suggestion that clear this road to me will be welcome.
<<Are banks avoiding seasonal?>>
What do you mean by “seasonal”?
Do you mean because of a seasoning issue? It would be my guess that is exactly why.
Did you do any rehab?
Did you ask the lender what the problem is?
Keith
Yes, is seasoning issue.
Lender asked for an appraisal review. I sent all the invoice I had. Then bank took price I bought ($77K) added rehab amount ($14K) and assigned $91K as property value.
I do rehab
You probably need a different lender. However, without seeing the appraisal myself it is hard to say if it is a good appraisal or not.
If you feel it is, have your buyer work with a broker that knows what they are doing…
I would look for a lender the “gets it”!
To say that rehab is a dollar-for-dollar game is ludicrous…I can’t beleieve lenders think they can sit in their office and make decisions about property value while never looking at the property…!
Unbelievable.
Keith
Comps looks goods. My appraiser is very conservative and realistic and even knowing I was looking for $120K he raised to $136K. I always tell appraiser don’t give me the price I’m looking for if you think is not a realistic figure. The issue here is not the comps, is the seasoning. Is stupid think that you going to buy a property, investing money in CC, rehab,etc and obtain no profit. Bank didn’t ask for interior pictures to see if the rehab added a new value. I bought the property bellow market value, simple. Now I’m trying with another lender.
My concern is to see in perspective to survey if other peoples are bearing the same, if anyone of you guys did smell market is changing, (definelly it does) if there are something that investor have to be alert. I assign contracts to new investors. I think I have to disclosure their that they may keep property for 6 months, just in case. I live in Tampa Bay Area.
I’m in St Pete, so I know this market well and it definitely is slowing down. Some lenders are more cautious than others.
A good broker that knows what they are doing can be an invaluable resource to an investor. 
Most lenders will not take an appraisal from the seller…they will order a new appraisal from one of their apparisers. Did they appraise the property or just sit in their office with a piece of paper and some crayons and do the math as submitted?
Keith
I’m mortgage broker. I’m behind or in control of the lender that the buyer is using. In this specific case, I recommended the LO that do special things for me. He is not an expert trying with flips so I sent him a list of Lender I used to work. From this list some fails to accept, and whom did it gave me a hard time. I’m watching what’s going on with seasoning. 1) lenders prefer to avoid 100%LTV Flips. 2) Prefer OO. 3) Less than 6 month seasoning is an issue, you may find one but is like to find a needle in a haystack In other hand, hurricane season could play some role in real estate market. Interest rate is another thing to take in consideration. I was reading that in Miami foreclosure are increasing this year comparing with 2004-05. Tampa and St Pete areas, with more possibility to grow than Florida East Coast, are willling to take more relocations that come from other less developed areas.
Most lenders will not take an appraisal from the seller…they will order a new appraisal from one of their apparisers. Did they appraise the property or just sit in their office with a piece of paper and some crayons and do the math as submitted?
Keith
It is as you were there. Exactly.
Why don’t you just find a lender that has no seller seasoning?
I’m trying. If somebody has a lead I will appreciate if share with me.
Try new centrury or first nlc…pretty sure first nlc is definate and new century…hah, who knows…those guys do everyhting
Why don’t you take the 100% LTV out of the picture by carrying back a seller second (second mortgage) to enhance the banks position? They would be at a lower LTV and might look past the seasoning.
Nate-WI