Jul 16 2009
New lender policy?
It appears lenders are implementing a new policy that will affect "flipped" homes. While there is money to be made fixing up REOs and reselling them, there may be less money made if you can't sell them immediately. Why? The income of house flipping is typically based on speed. The faster you can flip it and unload it, the more you profit.
So enter the latest fly in the ointment: lenders are beginning to refuse to loan on a property that hasn't been off the market for six months.
As it is, most REOs aren't in the best condition, so often the purchase is made with cash. And now that the house is rehabbed and will qualify for a loan…..well….HUMMM.
Buyers, do some research on your prospective purchase first and check with your lender on their policies!
