You can buy and flip homes like they do on TV – even with little money.
Contrary to what they tell you late at night on TV, you don’t need to purchase a course or attend any boring seminar. In this article we will discuss how to buy government owned foreclosed homes homes. In order to buy and flip VA loan foreclosure homes, you will need some money (less than $2,000) and an average credit score (620 or above). A little imagination and dedication will be necessary as well.
Many people know that the government has funds to help you buy HUD, Bank Owned, and VA homes. What most people don’t know is that the United States government has several programs designed to buy foreclosures. In addition to this, there are programs that will help you get money to renovate the foreclosure or REO once you own it.
There are several Government Subsidized mortgages that can help you buy and renovate property. The primary difference in each loan program is whether or not you have a down payment and funds for repairs. In this article we will explore all the main options and what is required for each program.
Light Rehab / cosmetic foreclosure: Cosmetic rehab is any property that has been neglected or trashed and that does not require a permit to remodel. Most of the time, this means that the home needs paint, carpet, landscaping, deep cleaning etc.
If you lack funds for a down-payment or want a cosmetic fixer upper, you should apply for a VA Home Loan, FHA 100, or USDA Home Loan. These loans are easy to qualify for and allow you to purchase almost any property as long as it is in move-in-condition. The down payments for these programs are $100 dollars or less and most people will qualify for the home loan program.
This can be a great way to buy a foreclosed home that is outdated or just beat up. Many foreclosures only need some TLC (paint, carpet and a payday loans Oklahoma new kitchen or bath) to realize their full potential. New paint and flooring can be one of the least expensive things to update in a home but at the same time, new paint and carpet can have a major impact in the sales price. Buy buying an older home, especially one with an ugly kitchen, you can find a great deal. Most buyers want to buy a home that is move-in ready. Ugly homes will usually sit on the market longer and have lower asking prices. Because there is less competition for an ugly home, there is a better chance at getting a great deal. If you chose to take this route, you will need some money for repairs or need to be able to do the work yourself. It is best to determine the total cost of repairs before you close escrow. You can ask the seller to make some repairs but do not expect them to both remodel the home and sell it for a great price.
If you have money for a down-payment but cannot afford a full renovation, consider a VA HLC – FHA rehab loan
These loans allow you to purchase property in any condition (even condemned properties) and will even give you money to renovate the home or complete the construction. The money for rehabilitation will only be paid as work is completed and you must have the property inspected prior to the withdrawal of construction funds. These loans can be used for any depth of remodel or rehabilitation. This includes cosmetic rehab (paint and carpet) to full construction of an uncompleted home. The required down-payment can be as little as $1,000 but this depends on where the property is located and the purchase price of the home. Because the renovation is paid for with proceeds of the loan, not much of your own money is needed for repairs. In most cases, the work should be performed by a contractor. In hiring a contractor, you will not need experience, you will only need a good real estate agent.
To qualify for any of the above programs, you must have verifiable income and an acceptable credit rating. In addition to this, you cannot have any late payments in the last 12 months. To apply, contact your nearest VA HLC representative or fill out the VA loan application here . For VA loans, there are program overlays and restrictions. For all other loans listed above, VA loan restrictions are waived.