Fannie assignment

The way I would read this is that if you're selling it for 100% of the purchase price, it's the same price (i.e. break even). 120% of purchase price implies a 20% profit. That's standard language for gov't properties.

It shouldn't be too much of an issue. On a $100k property and you double close on it, you can get a $20k gross profit before closing costs.

The language to be careful of is that the contracts typically are not assignable, hence the reason I mentioned a double close above. Even easier, try to work with FSBO properties for wholesaling and/or assignments.

- Tom

Tom what do you know about dry closing using the buyers money to close B-C then floating funds to A-B to close?

Fannie Mae has this restriction into their Special Warranty Deeds. It means that you cannot resell for more than 20% of what you paid for within 90 days. Fannie Mae addendums are not assignable, so you cannot assign to an end buyer. But, you could do double closings with transactional funding. This addendums are a little tough, so if you are assigning or double closing, it's easier working with for sale by owners.

hello ordred 3 of deans books, i have not got them yet,but where do i go to, to get the no money no no credit funding at,and do i need to call real estate brokers or realtors first?any help wouldbe gratefull.thank you kevin marshall

While it's true you can only make 20% over the your original purchase price if sold in less than three months. You can do this by using your own cash, using transactional funding, provided you have a buyer lined already lined up or private money.
You can NOT do a "dry Closing" on a Fannie Mae, they want to see your proof of funds not someone else's.
Besides if you're going to wholesale a property, 20% is a great return for not much work!

you can look for a cash partner... rehab the property, hold it for 91 days, then sell it for a profit larger than 20%...

The last property we bought was on 10/31/11 for $41,300; did the rehab which cost 11K; sold it for $ 70,000 to another investor for cash; BUT waited until 2/1/12 so it was past the 3 months. So that $ 17,900 profit over the $ 8260 Fannie Mae allowed, but since it was 91 days later we could make 34.4% return on our investment.

I am trying to do this with none of my own money. So if I do the standard double closing using TF can I use my buyers EM. This is my first deal just don't want to screw it up. I'm waiting to put in an offer cause I can't figure out how to get rid of it if my offer is accepted. Holding it is not an option I don't have the $$$ Thanks for any info I can get.

CountryBoy - responding to your question to me above...I haven't done any dry closings so will refer to the others above and their wisdom.

I'm a buy / rehab / hold and rent out investor. I can add that if you're trying to buy gov't properties with no money out of pocket it may be difficult. As stated above, you can use a money partner as one option. My experience has been I offer $500 earnest money for the deposit and they will come back with $1,000 to $3,000 cashier check deposit, due with 24-48 hours of signing the contract. Terms may vary slightly but generally it has to be hard funds (wire, cashier's check).

I believe your best bet for doing deals with little out of pocket funds is FSBO, motivated sellers. Lock up the contract for $1 to $100, assign it, double close, etc.

- Tom

I was in a class last night at my REIA and this came up. The answer to this 20% and 90 days limit is buying the house with the Land Trust. Of course they did not go into details since they were trying to sell their upcoming bootcamp so I don't know all of how this works, but I did search here on DG and there are blogs with some info. Hopefully someone that has done this before can explain.

I'm new too, so I cannot explain this in detail. However, I was told that you can open a new company, buy the property with that company. You then sell that company to your buyer and the house goes along with it as an asset. This would bypass the 120% rule.

There is the short version, maybe an experienced investor can explain it more in detail for us all.

Glen

http://www.deangraziosi.com/node/9663

LLC
Trust
add buyer to contract and you quit claim at closing

just a few