203KS Loan of 53rd Bank and how it can help your wholesaling business model
By Jeanette Pangilinan, Millionaire in Training, MMMChallenge.com=========================================
This is something I have learned in networking with other investors here in Tampa bay.
FHA 203KS loan is the streamlined version of 203K FHA loan. And 53rd Bank have a great program wherein they brought Lowes and Home Depot in the picture. What do I mean by that? Well for a first time home buyer they now have the priviledge to work with their favorite and trusted brand names Lowes and Home Depot in doing their rehab work for them. Home Depot and Lowes works with 53rd bank in order to get the rehab done up to $35,000 worth of repairs as long as it is none-structural (no additional or removal of rooms), no fencing, no landscaping and the likes... again I am not an expert nor a mortgage broker or loan originator, please perform your own due diligence.
What happens is, this gives the qualified buyer the ability to renovate to their hearts content up to $30,000-$35,000 worth of repairs. New kitchen, new bathrooms, new a/c, new roof, new flooring, new cabinets... etc. etc.... and with the assistance of Home Depot or Lowes where they will estimate, guide and will do the renovations for the buyer. Buyer would feel more comfortable doing their own renovations with their own taste.
This should address the dilema of not having the money to renovate for the first time home buyer.
Total cost of acquisition and renovation should be close enough to the after repair value or future value of property after fix-up.
Ok, so what does that do to my wholesaling business? Want to profit up to 20% mark-up? If you bought a property and will sell it 90 days or less to these type of buyers, FHA will allow up to 20% mark-up profit. If more than 90 days and with a little improvement on the property, FHA will allow a 40% profit by wholesaling the property to this first time home buyers.
These type of buyers are most often outbid by cash buyers and are not able to get a property under contract because they go after the properties in which 25++ investors are eyeing upon too. Want less headache without the renovations? Wholesale to these type pre-approved buyers. Where do you find them? Talk to your local Mortgage Loan Originator. They've got a pile of them. Ask them where and what these buyers are looking for?
Now make offers on these properties that these buyers are looking for and sell it to them.
Smart for Fifth Third bank to bring in Home Depot and Lowes into their program. :)
Hope you picked up some great ideas here.... happy wholesaling! :D
Here's a resource from Director Jo Amick: (Thanks Jo!:) http://www.brianbeattyonline.com/xsites/Mortgage/258/content/uploadedFiles/203Ks%20Quick%20Reference%20Guide.pdf
And here are some resources from google library:
http://www.dallasfhaloans.com/493/fha-203k-or-203ks-may-be-your-answer-when-buying-a-home-that-needs-work/
http://www.loansquawk.com/blog/fha/fha-203k-remodel-loan-rehab-loan-fha-203ks%E2%80%A6what-read-on%E2%80%A6/
http://pulsefunding.com/loans/rehabilitation-loan/
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Disclaimer: I am not an expert nor a mortgage broker or loan originator. Do your due diligence. :)
Why Bill Should be one of the 24
By BillI am originating residential loans during business hours and having a tough time keeping ahead of the new Reg Z, TIL and RESPA regs that Uncle Sam has put in the way of getting new mortgages here in 2010. My specialty has been Reverse Mortgages and now that there is a purchase money loan, more and more of my time is spent trying to educate Realtors about the way that I can help build value and drive transactions from the people they already know. What a kick in the pants though to find money for our seniors from their house at a time in lending where they have little recourse to increase their household income. We offer non-recourse loans to them and their families. Our mortgage company is cranking out 40% FHA, with a lot of 1st time home-buyers. The reading and regs and new appraisal requirements where by loan officers can't speak with an appraiser, have started to take the joy out of helping people buy and refinance real estate. It is a constant re-awakening to the horrors of zero equity, high payments and lack of income. I feel fortunate to have a position in real estate, yet it is a 100% commissioned deal; if I don't fund a loan, I don't get paid and my company doesn't get their split.
Cry me a river right? Not so fast, because I still feel lucky to have become a Real Estate Professional in the first place, lo these 12 years ago. But here's the real deal on Bill Evans; I am on a Quest to change the part of the real estate industry from which I do make a living. I figured a few years back, when the sub prime melt down almost put me back to Bartending, that the future transactions I funded should be my own. I have relentlessly read and educated myself about: wholesaling, flipping, bandit signs, Short Sales, REOs, auctions, deed in lieu, foreclosure, Tax liens, Tax Deeds, re-casting notes, assignments, Master lease options, seller carry back, wrap arounds, 2nds, loss mitigation, BPOs, option contracts, internet marketing, lead capture, squeeze pages, email blasts, google rankings, drip campaigns, direct marketing, absentee owners and the list goes on and on. A lot of these things I have put into play as a way to find deals.
Now, I am focused. Now I am resolute. The focus has narrowed to finding small regional banks and commercial brokers whose balance sheets and data bases have assets and notes that they need to take off the books. I am looking to speak to anyone and everyone that I meet, email or bump into; at Starbucks or the dry cleaners and tell them in my elevator speech that I buy commercial real estate. Self storage, Multi Family Apartments, Student Housing and Parking Garages and 3 star chain "flagged" Hotels. I am looking in major markets where the jobs are coming and the workers need to rent, store and live.
I have always been a team player. I love sports and learned my best life lessons on the fields of play. I also have always been honest, to a fault. So, that's my story. I have dreams of a life in commercial real estate where deals are going to be made in this the opportunity of our lifetimes. An 80 year cycle, some have said. I will change my circumstances for the betterment of my beautiful and hard working wife, my life partner and Mother of our only child. I will succeed because I can and know that I will. I will provide a life of abundance for them and me and I will do this by the strength of my will, the use of my brains and by opening my mouth to ask. It is no secret that the power to change lies within.
So let me ask you now to pick me because I'm a giver not a taker. I'm a creator and value add player. There is a lot to know and I can share what I know with everyone around me while soaking up like a sponge the knowledge of those more experienced in front of me. Don't take advice from people that aren't as smart as you, but surround yourself with those that know more than you. Being here and becoming a part of the Real Deal is a chance to make it happen and find a home for the deals, the growth and friendship I seek. It's selfish to say, but I think that I have a lot to offer.
With greatest humility and thanks,
Bill
FHA Waives 90-Day Rule For Flipped Houses
By Arif- All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
- In cases in which the sales price of the property is 20 percent or more above the seller's acquisition cost, the waiver will only apply if the lender meets specific conditions.
- The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.
Homebuyer Tax Credit Resurrects Zero-Down Mortgages, Imperiling FHA
By Ed YoungHomebuyer Tax Credit Resurrects Zero-Down Mortgages, Imperiling FHA
Wall Street Journal op-ed, Homebuyer Tax Credits Threaten the FHA: Funding a Down Payment with the Credit Increases the Odds the Buyer will Default, by Robert C. Pozen (Harvard Business School & MFS Investment Management):
It appears that now the government is the enabler instead of the mortgage brokers and the scheming CEO's on Wall Street.A few weeks ago, President Barack Obama signed legislation extending an $8,000 tax credit for first-time home buyers. The refundable tax credit, available even if a family has no taxable income, will enable many more buyers to close on a home. But it also could bankrupt the Federal Housing Administration (FHA) and, by doing so, damage an already weak housing market.
The tax credit was put in place as part of the stimulus package signed into law earlier this year. Initially, it was available only to first-time buyers with a combined income of $150,000 or less ($75,000 for individuals). Approximately 40% of all first-time buyers used the credit in 2009, so extending it was strongly supported by real estate brokers, home builders and their congressional allies.
The extension the president signed makes the credit available to first-time buyers, but also to people who have owned a home for at least five years. In addition, it raises the maximum income for a qualified buyer to $225,000 a year for couples and makes the credit available until mid-2010. (It had been set to expire at the end of this month.)
The problem is that the FHA insures mortgages of homes below certain price levels with such a low down payment that it can be funded solely by the refundable tax credit. And, as we've seen in the recent housing crisis, buyers with no skin in the game are more likely than others to default on their mortgages when the value of their home falls below their mortgage balance.
Here's how the credit allows buyers to avoid putting their own money at risk. Suppose a couple making $60,000 annually buys a home worth $200,000. They can get an FHA-insured loan if they put down 3.5% of the purchase price, about $7,000. The couple will also need to come up with another $1,000 in closing costs, for a total of $8,000. The couple can either dip into savings or borrow that money from relatives or somewhere else on a temporary basis. After closing, the couple can quickly obtain the $8,000 refundable tax credit to pay off their temporary loan (or replenish their savings). In effect, they will have bought a home without putting any of their own money at risk. Owners who don't sink their own money into a house are much more likely to default on the mortgage. ...
We all want to help first-time buyers acquire homes and support the depressed U.S. housing market. Without real down payments, however, new homeowners are likely to default on their mortgages, and the FHA will probably need a taxpayer bailout. The Obama administration should increase the requirements to qualify for an FHA-insured mortgage. In addition to the 3.5% down payment, the administration should also require that buyers put down at least half of the tax credit they will receive for buying the home.
Ed Young
HISRealEstateNetwork.com
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