flipping rules

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fyi: i bought a house, did all the work needed within a couple months , had a buyer & could not sell because the government is getting involved in regulating any hud, VA , or FHA. loans to force the sellers to hold title for up to one year. this particular one was able to close after 6 months, but I had to pay the mortgage, taxes, insurance, & utilities through the winter. Just thought some people might want to know that. beware.
Rob
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HUD loans aren't designed for flippers. how'd you pull that off?
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The government is and has always been "involved" in government- housing program loans for some strange reason. I'm sure those restrictions were available for you to be aware of at the time you financed the house on those terms.
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And another one who watches too much HGTV without bothering to read the regs comes in crying. IT'S NOT FAIR!
Steve
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I was the seller & bought with cash, the buyer used a FHA loan. Just forget I tried to offer anyone any advice.

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When you listed it for sale, could you have put a restriction such as 'no FHA loans'?

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On Fri, 6 Apr 2007 09:42:27 -0700, "Roger Shoaf"

I have heard that that is a bad idea, but generally a contract provides a time limit of maybe 45 days for the buyer to get a mortgage and close.
If the buyer couldn't close for some reason, why couldn't the seller go find another buyer after the contract expired?
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What if the tenants don't buy, but also don't move out? Then you've got a very annoying situation on your hands.
I've heard of similar things happening when a buyer lets the seller stay after closing, because the seller's new house won't be ready yet, and then the seller's new house falls through, and the seller doesn't move out.
If you are a buyer, it's a very good idea to not close until the house is empty, and if you are a seller, it's a very good idea to not let the buyer take position until after closing. Anything else is asking for trouble.
--
--Tim Smith

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wrote:

Amen, amen, and amen. We're still trying to get out some renters who should have been gone January first. You would think you just go kick them out.
Nooooooooo. There's writs to be writ. Processes to be served. Legal action to be taken. Chiggers are easier to get rid of.
Steve
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Thanks for the reminder. Every once in a while I think it would be a good idea to invest in rental properties. Notes like yours bring me back to sanity. There is money to be made, but it is certainly not easy.
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wrote in message

We own three rental properties. Two we do as vacation rentals. They are seventies tract houses in nice neighborhoods in Las Vegas. They were almost paid off, and we pulled all the equity which we put with a CFP friend getting 12-25% on first deeds. Now our payments are about $700 per month on each. The first deeds bring in way more than that. Our vacation rental is $1500 a week, $3500 a month. We have one rented (at a discount of $3,000 a month) for May to September this year to one family. They are cash cows and we love them.
HOWEVER, the rules of an innkeeper apply. If you want to toss them out, all you do is call the law, describe the problem, and the law escorts them out immediately.
We own one house in Utah that we are waiting to move into and get the heck out of Las Vegas. We rented it to some friends of friends who were building a house. Change order after change order and drama after drama have extended it from January till today. In Utah, they don't use Marshals to serve and enforce evictions. They use process servers, and they charge handsomely. Anyway, we have served notice and they have agreed to be gone by May first.
We'll see come May 1.
Rentals suck. Vacation rentals rock IF you have a good location. Listing on the Internet at www.vrbo.com is less than $200 per year, and reaches world wide. You do have to furnish and provide utensils and linens, but, when you can make two months mortgage payments in a week, you only have to rent it one week out of every two months. After that, everything else is gravy. Costs for fixing it up for rental and furnishing will be recovered in the first year if you don't do a ton of work. And a whole lot less headache than renters. Our last renters were police officers, and the biggest PITAS of all renters.
Steve
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wrote:

We rented to a Metro Corrections Officer. Constantly late with rent money. We called his Internal Affairs and they brushed it off as a landlord-tenant problem. We asked, don't your sworn officers have a moral obligation to fulfill their financial responsibilities?.
If the guy has serious money problems, then he is subject to bribery.
We went to court for the eviction and the judge did not want to enter a judgment as the guy said he had been out of the house for five days. I asked the judge: why are we standing here, he just wasted everyone's time? I further stated to the judge that I was going directly to the house and if the guy was not out of the house I would return to her court room seeking a judgment.
Oh, the house had doubled in price over 18 months, so that sucker was sold (cash buyer) and no more head aches.
-- Oren
"The voices in my head may not be real, but they have some good ideas!"
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This kind of problem can usually be avoided when checking the prospective tenant out in the first place.

Here is an example of not knowing the rules. If the tenant was out 5 days before the court date, then there was no reason for you to continue seeking the eviction. If he still owed you rent then depending on your states procedure, you should have been entitled to a judgement in the eviction process or a different small claims process.

Sounds to me like your headaches paid well.
--
Roger Shoaf
If you are not part of the solution, you are not dissolved in the solvent.
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On Sat, 7 Apr 2007 11:15:34 -0700, "Roger Shoaf"

BTDT, verified law enforcement officer with 15 years service - Las Vegas Metro PD.

I did know the rules. The tenant refused entry for an inspection (properly notified certified mail and inclusive in the lease). The inspection was only intended to see why the tenant had replaced a door without notifying me first, also inclusive in the lease.
Because of his refusal for entry, violation of the lease (numerous) and money owed I went with eviction. I didn't know he evacuated the house 5 days early until he mentioned it to the judge. That is the reason for my question to the judge:

I could of went to my home, he was living in and got into a confrontation. I could of even went to fix the front door and forget to put it back in, but I didn't.
The guy had plenty of chances. Oh, the judge kindly told the jerk he would not be getting his deposit back; nor can he ever tell an owner of a property they cannot enter the premises with due notice. YOU DON"T OWN THE HOME is what she told this LAW ENFORMENT OFFICER.

I can laugh now. A stroke of lady luck. Also had another renter and when the lease was up that house was SOLD, near double. Then bought another house, and moved. Then sold the previous primary home.
Sunk all the rewards into my latest house. I had a guardian angel and good "team members". Oh, it really paid well for the TAX MAN.
-- Oren
"The voices in my head may not be real, but they have some good ideas!"
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Yeah, what are you gonna do? Call the cops? lol
--
Often wrong, never in doubt.

Larry Wasserman - Baltimore Maryland - lwasserm(a)sdf. lonestar. org
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wrote in message

Sure tenants can be a pain, but if you take the time to qualify them then you end up with some one else paying your mortgage for 20 or 30 years and when you do sell you have all of that lovely equity that has built up.
If you take other steps to manage your risks, like keeping the cash flow positive and diversifying, rather than wheeling and dealing in zero money down use other peoples money schemes, you will be able to ride the waves of change and come out OK.
--
Roger Shoaf
If you are not part of the solution, you are not dissolved in the solvent.
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On Sat, 7 Apr 2007 11:09:12 -0700, "Roger Shoaf"

I pre-qualified two tenants for one house; a law enforcement officer, and a legal secretary. Verified employment, etc. Strange how folks smile in your face to get in and then snivel when you demand rent that's weeks late.

Positive cash flow and other peoples money. Ain't this a great country?
If the numbers work and all bases are covered. I would do the deal. A 100 bucks a month in the positive is a 100 bucks.
-- Oren
"The voices in my head may not be real, but they have some good ideas!"
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Do the math, Roger. We got refi house loans of 5-6%, took that money, and get 12-25%. We net from 7 to 18%. Which we take and plow back into more first deeds. You got $200k in equity? Borrow it against your house, and put it in investments that will make you more than the interest you pay on that loan. Of course, it is nice to have a guy that is a CFP, and who you happened to graduate high school with in 1966.

Zero money down use other people's money schemes? Where do you get this stuff? I think you got the wrong thread on that one, bud.
First deeds are construction loans for projects and they are secured by the deed to the land. The borrower is limited to the % he can borrow against the deed, usually a LOT less than 80%. So, even if they go belly up, the lender makesAT LEAST an instant 20% by being the lein holder of the deed. No, not lien holder, in some cases they actually hold the deed docs.

Hope you got it that time. Do some reading. Talk to your banker. Talk to a CFP you can trust. You can do better with what you got to invest than messing with renters and low percentage "schemes".
Steve
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wrote

I have seen people that were worth millions on paper one month be bankrupt six months later. What happens is they leverage so much of their property then they either get several bad tenants at one time or their property sits vacant and for some reason the bank wants their money. It really does not take long for the house of cards to come tumbling down.
If it were really easy to gurantee that an investment will always make more than the mortgage payment your theory would make a great deal of sense, but realestate is a long term proposition, and if you can't survive with a 50% vacancy rate for 6 months then you can get in trouble real quick.

You might be doing well, but if the land you lend your borrowed money against has to be foreclosed on and you have trouble finding a buyer at the price you need to recoup your losses you can be upside down, don't kid yourself. There is a reason those folks are willing to pay 12-25%.
--

Roger Shoaf

About the time I had mastered getting the toothpaste back in the tube, then
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That is why there is a percentage cap on what will be lent. If a property is worth $10 million, all that will be lent on it is six. When that phase is complete, the property has appreciated because of structures built and completed on it, and the land is still worth ten, thus more can be lent to bring in subsequent phases at a lower risk to the lenders. Every wonder why properties are built in phases? The rate is determined by the term. Short term loans are always higher percentage.
But you knew that, right?
Steve
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