When Flipping Real Estate: Where Do I find Lenders That Have “No-Seasoning” Requirements?

Okay, so you are purchasing a short sale property and would like to resell the property fairly soon after acquiring it.  But, you are having difficulty finding a lender for your re-sale buyer that will finance the transaction due to the title having very little or maybe no seasoning.

Whether you are a licensed real estate agent that does the occasional “buy low, sell high” short sale transaction or you are an investor that buys multiple short sale properties with the intent to resell for a profit, you will need to find a lender for your end buyers, which has NO seasoning requirements.

What is seasoning?  Seasoning is the amount of time that title has been in the name of the current owner.  Some lenders or title companies will not finance or process a transaction when title has not met a certain minimum seasoning time.  For example, all FHA loans require a minimum of 90 days.

So how do you get the deal done?

1. Generally, direct lenders or portfolio lenders do not have seasoning requirements. Steer away from mortgage brokers due to the fact that they are getting scrutinized for every loan they write and are having a tough time getting these buy and sell transactions closed.
2. Always get the buyer’s written permission to call the loan officer processing the loan and ask them what the lender’s seasoning requirements are.
3. Always get the buyer’s written permission to allow you to approve or choose the lender they use should the lender they request be unable to finance the transaction.
4. Once you have a list of preferred lenders, be sure you call regularly to re-verify their seasoning requirements.
5. For properties you will hold less than 90 days, be sure to always clearly market that financing needs to be cash or conventional.  You’ll save everyone time and frustration.

Remember, when you are working in the field of creative real estate you have to make sure you cover your bases, from acquiring a property to selling the property to closing and getting paid!  A good thing to keep in mind and a good motto to follow is “Start with the End in Mind!” We have never been in a better market to join the niche of short sale investing, just make sure you are well prepared from start to finish so you can maximize your profits whether you are a real estate agent or an investor when buying and reselling short sale properties!

For additional information on closing with a short sale flip, check out our Settlement Manual which is part of our Short Sale Flagship System.  And for more real estate industry articles and videos visit www.RealEstateBusinessMentors.com or visit www.AskBobLachance.com for any real estate questions.