Many of you will remember our simultaneous close program from several years ago. We traveled all over Texas showing real estate investors how to sell properties faster and easier using owner financing (step 1), and then how we could buy that owner financed note right away before the first payment was due (step 2).
We made it really easy by checking credit and prequalifying buyers right up front so the investor would know how much cash they'd have in their pocket after closing. The days of blindly owner financing a property to the first warm bodied buyer, holding the note for 3-12 months for seasoning, and then hoping to sell it for a good price were over (by the way, if you're still doing business that way.. you need to call me). Even after our focus shifted to subprime lending a few years ago, we continued to have customers ask if we could still do the Texas Two-Step program.
You've probably heard on the news or read somewhere that over the last six months the subprime lending market has practically disappeared with over 60 lenders going bankrupt or exiting the business. Several investors have told me they are seeing increased foreclosure activity (opportunities) in their areas, but that they are hesitant to buy properties not knowing if their buyers can obtain financing. The few subprime lenders who are left won't do the rehabs--they want the seller to have owned the property for at least 6-12 months ("seasoning of deed", "title seasoning") and they're going to have a problem if you bought the property for 50k last month and now you're selling it for 100k.
Here are the highlights of our Texas Two-Step program:
- 3-5% down payment
- buyer needs only one score above 600
- no source or seasoning of down payment funds
- minimal closing costs (appraisal, title, recording.. no survey!)
- no minimum "seasoning of deed" requirements
- 10-14 day closings!
Our customers rarely own a property more than 45 days, and buying at a distressed price, fixing it up, and selling for appraised value is the norm. Nearly every day I talk to a buyer who had a subprime approval that fell through, and now they are buying a house from one of our investors using our Texas Two-Step program. Take a look at this page for some more details. As always, please feel free to call me with questions.
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