REO Danger – Avoid Fannie Mae if you want to Wholesale or Fix-and-Flip for a Profit!
19 Mar
Post written by Mike Lima. Follow me on Twitter.
For most investors, finding good REO deals is hard enough. It gets abundantly harder when you’re trying to strike a deal with Fannie Mae. Yes, the same Fannie Mae that is a government-sponsored enterprise that was chartered by Congress. The same Fannie Mae received a pledge of $200 Billion by the US Dept. of Treasury in Sept. 2008, to provide liquidity to the housing/mortgage markets. Surely such a government-backed organization will try to encourage properties to be revitalized so the housing market can recover more quickly. Read on, my investor friends…
If you find a bank-owned property that’s in good condition and at a good price, chances are you won’t get it, because owner occupied buyers get the first crack at them, through Fannie Mae’s First Look program, which gives those buyers a 15 day advantage to lock up those deals. Fair enough — if a family is willing to buy the property and make it their primary residence, I think they should get a head start over investors to do so.
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