This is a continuation of the Flip2Freedom podcast with Sean Terry. In this episode, Sean interviews Robinson Aries and finds out how wholesaling took him from bankruptcy to making bank.
Robinson: You never know, so you create the equity on these properties, but you’ve got to put an offer. You’re not going to get a property if you don’t put an offer. Not only HUD. I’m talking about bank owned properties, short sales, even Fannie Mae. Sean, I’ve got to reveal something here, that probably nobody knows.
I have flipped two properties from Fannie Mae. I know investors are saying it isn’t profitable to flip Fannie Mae. Yes, you can flip Fannie Mae properties and I’m going to tell you the little secret. I already flipped two properties and I can show you and prove to you what I did. Basically, if you read the contracts from Fannie Mae, you’ve got to read everything. First of all, there’s a period of 15 days. They give 15 days to claim the residence, or people are just going to leave the property. They give them the choice. Basically, the investors are out of the question for the first 15 days. Now, you’ve got to find these properties that are available for investors, and it’s pretty much similar to HUD. You go to homepad.com and you’ll find properties that are available for investors.
So now you have those properties that you can put an offer on. Of course, in the contract from Fannie Mae, it says that I have to read the clauses, but just to give you a brief example, you cannot resell the property for more than 20% of the purchase price. Otherwise, you have to wait 90 days.
So, what that particular clause is saying is, you cannot sell more than 20% but you can sell for less than 20%. So, if you are buying a property for $50,000 from Fannie Mae, 20% of $50,000 is $10,000. So, $10,000 for a wholesale deal is not bad at all from $50,000. So, what if you put a contract for $50,000, instead of $59,900. You can sell the property and still get $9,000 out of it. You see what I am saying?
Sean: Now, let’s talk about this real quick. I’ve been on the HomePath website. It’s not as easy as HUD, where you can just submit and you know the next day. But you do fill out a contract and you can upload it to their site. Is that correct?
Robinson: That’s correct. Actually, they changed a little bit of that. Because before you had to send the contract, get a realtor, like normal contracts. But you have to download the addendum that they have over there. The addendum clearly says that if you’re going to resell the property, you have to wait 90 days. But not if you sell for more than 20% down. So you have to download the contract, do all the paperwork. It takes more time, of course. You have to go by their addendum, and also put it together with your realtor’s association in your area. So, you have to put those contracts together. It takes time, but believe me, it’s possible.
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