flipping – Karen's Perspective

Flipping Properties

flip house

What makes a property a “flip”? According to RealtyTrac, a property that is bought and then sold again within 180 days is considered a “flip”.

Apparently, we’re doing our share of flipping here in North Carolina. RealtyTrac put out a list of the top 10 areas in the country for flips and Guilford County, North Carolina (my home) ranked number 5 on their list. I’m happy to report that we and our coaching students helped significantly with that ranking!

RealtyTrac also reports that, in 2010, 15.6% of the foreclosed properties purchased in Guilford County resold within 6 months. No wonder house prices have dropped so dramatically and buyers want to purchase, even retail properties, at such unbelievable discounts.

Are you a “flipper”?

90 Day wait period to sell properties waived – Hooray!

Recently, HUD enacted a ruling that a property could not be purchased and resold in less than 90 days. Well, you could, but the property would not be eligible for FHA insurance meaning the buyer could not qualify for FHA backed loans.

Effective February 1, 2010, this 90 day waiting period is waived.

There are conditions, of course. Some of them include:

the transactions must be arms length. There must be no interest between the buyer, seller and/or any other party to the transaction.
no additional flipping activity exists during the previous 12 month time frame for the subject property
the property was marketed openly
if the sales price is more than 20% above the sellers purchase price, increase in value must be justified by supporting documentation and appraisal as well as inspection

Why is this unnecessary 90 day wait period finally being waived (even if temporarily)?