Many Investors don’t think that they can short sale an FHA loan and still make a profit, due to the guideline that FHA accepts a minimum 88% of the appraised value. I am here to tell you about an FHA deal that will bring a Pretty Profit!! This house is a 3 Bed/1.5 Bath/1.5 car garage, approximately 1200 sq ft in Casselberry. From the beginning, it was challenging since we had non-paying tenants in the home that were not as cooperate as a Seller would be for access to the property. The best part of a typical short sale is that a lender will obtain a value that is good for 90 days and if you are in a Seller’s market, you end up with a higher profit, since the values are increasing based on the sales.
The Seller just wanted out of this house debt and didn’t know what to do with non-paying Tenants!! The lead came in from my office signage. The property was listed and an offer was submitted. It took the short sale lender about 90 days before they ordered the value on the property. We were very concerned about having access to the home when the appraiser came out from the short sale lender. On an FHA deal, the short sale lender requires an appraisal on the home which is good for 4 to 6 months, versus the standard 90 days for a BPO value.
I knew that the Tenants were going to be a problem and I was prepared to handle that situation. The Tenants had knowledge of how a short sale worked, so they wanted to live in the house as long as possible without paying rent. Since the number one thing in a short sale is to meet the BPO Agent/Appraiser to make sure that all the repairs were considered when determining value, I knew the Tenants needed to go! The Tenants were evicted so there were no problems with meeting the BPO Agent/Appraiser out at the house.
The house was built in the 1980’s and was not in bad shape at all. The repair was a light rehab which consisted of a new roof, new air conditioning, adding a shower in the master bathroom, paint, carpet, new garage door and new kitchen cabinets. The cost for the rehab and the supplies was approximately $20,000, most of this was from the new roof and new air conditioner.
Whenever I purchase a property and plan on rehabbing and then reselling it, I include a minimum of 4 months hold-time due to the seasoning on the property. Seasoning is how long the new Seller has owned the property. If I wanted to sell the property to another FHA buyer, then they require 91 days of seasoning and two appraisals to make sure that the value on the property is correct. If I wanted to sell the property to a conventional buyer, as long as that lender was not mirroring the FHA guidelines, I could sell to a buyer in 31 days. Obviously, there is no seasoning required for a cash buyer.
The property was purchased for $78,000 and I will not be listing it through the MLS, as I am going to sell the house quickly without paying a realtor commission. The property will be sold for $145,000.00 with a profit of $25,000. Not bad for a light rehab!
Please keep sending me your questions and topics that you would like to hear about, so I can be sure to keep feeding you with the information that you need in order to move confidently through 2016 and bring your Real Estate Dreams to Life!
Still Crushing Short Sales,
Like me on www.facebook.com/foreclosuresgonewild
Like me on www.facebook.com/sellfastrealty
Kimberlee Frank Broker Short Sale Expert
Kimberlee Frank is known as “The Real Estate Junkie,” for her unique ability to find ways to creatively help buyers and sellers no matter which direction the real estate market is heading. Kimberlee had already worked as a legal administrator for an Attorney, Builder and Broker for 18 years when she began her Real Estate career in 1998. She dotted the i’s and crossed the t’s on hundreds of real estate transactions and thousands of documents, making her an expert in real estate documentation. Kimberlee’s success began in Fenton, Michigan. She specialized in selling, purchasing, renovating, retailing and lease optioning single-family homes. She has helped many sellers get rid of their “headaches” and helped many buyers find their dream homes!
Since 2003, she has specialized in foreclosures and short sales. After realizing how many families were being forced out of their homes due to financial difficulties, Kimberlee had a heartfelt obligation to use her experience to help those families. She has mitigated and closed over 500 short sales with the mortgage companies, saving Sellers from going into foreclosure. In 2006, Kimberlee and her family moved to Florida. She lives in Oviedo and her Sell Fast Realty Office is in Winter Springs, serving residential and commercial sellers and buyers in multiple counties in Central and Southern Florida.
Kimberlee is also a Trainer and Mentor and has created several different “How To” systems on real estate. Her unique strategies continue to educate real estate professionals across the country. If you have a proven system to help others out of hardship, why wouldn’t you duplicate it and share it with as many people as you can? Kimberlee continues to work with this philosophy!
Kimberlee Frank has been featured on ABC, NBC, FOX, CBS as well as Wall Street Journal, Newsweek, USA Today and numerous other publications. She is the bestselling author of “Big Ideas for Your Business” (Advantage Media 2009). She was also selected as the #1 Short Sale Expert by America’s Premiers Experts.
Please contact Kimberlee at her office at 407-888-3433 to schedule a Free Facts About Foreclosure Seminar. She has numerous testimonials from sellers, buyers and other real estate professionals who are familiar with her giving heart. Whether it is 1 person in need or 1,000…..Kimberlee will educate them on real estate and give them a solution with a peace of mind!
Are you unsure what to do with your house? Do you need to educate yourself about your options. Click the following link Free Facts About Foreclosure for more information.
Post Footer automatically generated by Add Post Footer Plugin for wordpress.
Like this post? Subscribe to my RSS feed and get loads more!