2010 Land/home strategy

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Posted by ShawnNC on February 01, 2010 at 15:40:26:

Hello all,

I am just curious as to what kind of land/home package investing strategies (if any) people are planning on using in 2010?

I am still working on my first lease option deal and it is very frustrating. About the only way to finance people for these homes is FHA and it has increased credit score requirements to 620. People are having trouble coming up with down payments or having good enough workable credit situations to allow them to qualify within a year. Not to mention recent SAFE Act legislation in NC that will limit investors to 5 owner financed or lease option deals per year, although I'd be happy to get just one going at this point.

I hear that the 5 deal rule will probably be reversed by HUD which means no deals unless you are licensed as a mortgage originator. So one option would be to get licensed and go the owner financing route. Getting licensed isn't cheap though and cash flow would be nice but I am going to need some chunks of cash coming in as well.

Buying and holding a land/home could be still viable with decent cash flow. But using a land bank technique (cash-out refi) may be next to impossible in the current banking climate unless you can find a small, local bank that is willing to work with you.

So what are you land/home investors doing out there?

One thing I do notice in my market is that there are a lot of investors buying foreclosed land/homes. Many of the nicer REO's are sold within days so I wonder if wholesaling could work. Anyone here tried wholesaling land/homes?

Thanks,

ShawnNC


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