Investors

I Want to Flip Property

Investment types: Rentals * Rent to Own * Lease Purchases * Hard Money Lenders * Flips Sponsored

There are many opportunities for investment.  Currently,  I manage interest in over 100 properties, to date.  I have flipped over a dozen, and even built and sold spec homes. My experience and expertise could be of your great value.
 
"I limit myself to representing one investor in a specific area at a a time, to deter competition.  Therefore your ideas are safe with Thibodeaux Reed Realty."-Rosalind Thibodeaux, Broker     

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To learn more about investment properties and Sponsored Flips give us a call today!  337.658.0181
 
 
FAQ by Investors: 
 
Courtesy of Tuten Title & Margo Dugas  
 Q.  If I go to the assessor and pay the back taxes on a property do I own it?
   
   A.  No, you do not.  Paying the back taxes on a piece of property does not cause title to vest you as an owner. 
 
Q.  How long do you have to redeem a property sold in tax sale?
 
   A.  Property sold in a tax sale can be redeemed up to three (3) years later. 
 
Q.  What is the difference between title opinion and insurance?
 
   A.  A title opinion is merely a licensed attorney's opinion as to whether title to the property is clean.  Title insurance takes attorney's assurances a step further by actually providing coverage to you as the buyer in the vent a claim related to your title was to arise in the future. 
 
Q.  Can I buy a property without title insurance?
 
   A. Yes, property can be purchased without purchasing title insurance, but it is not advised. 
 
Q.  Who is responsible to clear the title?
 
   A.  In the standard purchase agreement created by the Louisiana Real Estate Commission, the seller of the property is responsible for all charges and fees related to clearing the title.  However, that can be negotiated between the parties to where the buyer assumes some or all of the fees related to clearing the title. 
 
Q.  Why do the banks not have to disclose any defects?
 
   A.  Typically, when a property is owned by the bank, the bank makes no warranties to the subsequent purchaser.  Additionally, the bank usually does not do any extensive inspections on the property in order to discover any defects.  Those are just a few of the resins why the bank is not required to make disclosures.
  
 Courtesy of Liggo Insurance 
Q.  Do I have to insure rental property or is the tenant responsible?
 
   A.  If you own the building you are responsible to insure it. 
 
Q.  Can I insure a property for just what I owe or have in it?
 
   A. There is a DP-3 form (Dwelling policy) and a DP-1 
DP-3 is a replacement cost policy that requires that the home to be insured for replacement cost based on square footage of the home.  On a DP-1 basic coverage form you can insure for less bout may be subject to co-insurance penalty on a partial loss.  
 
Q.  Are there temporary policies for houses that I plan on flipping?
 
   A. Yes we can write from a 1 month to 12 month.  Vacant renovations policy with or without liability.
 
Q. Will a policy on a house I am flipping cover the workers?
 
   A.  No, only coverage for the damage to the home and premises liability (if someone from the neighborhood comes onto the property and gets hurt.) 
 
Q.  If I pay cash do I need flood insurance?
 
   A.  Different companies have different requirements.  Some companies will not write the property insurance without a matching flood policy in a high risk zone. 
 
Q.  If I pay cash what is the minimum insurance I should carry?  
   
   A.  Replacement cost  
 
Courtesy of St. Martin Bank & Renee Oubre 
Q.  What does my credit score have to be? 
 
   A. The Bank does not only consider a credit score, but generally a score of 640 or better is required. 
 
Q.  Do I need a lot of collateral?
 
   A.  Bank will lend up to 80% of the purchase price or if it is a refinance, the Bank will lend up to 80% of the appraised value.  Other collateral owned can be offered to cover the 20% equity injection. 
 
Q.  Does the house have to be in good condition?
 
   A.  If the home needs extensive repairs, the funds will either need to be borrowed in the form os a line of credit to make the necessary repairs for the home to be inhabitable, or proof of funds will need to be provided and held in escrow for the necessary repairs. 
 
Q.  Does the Bank require that all repairs be done by a licensed contractor or can I do it myself?
 
   A.   The Bank takes each loan application on a case basis.  If the Borrower elects to do the work themselves, the Bank will need to document the ability to complete the work (such as have they done this in the past on previous projects personal home, etc. )
 
Q.  Is there an average on closing cost?
 
   A.  1% Loan commitment fee, $350.00 loan document fee,  $22.00 Flood determination fee.  If loan is over $75,000.00- $104.00 Lereta (property tax tracking fee).  Appraisal and title insurance are required on all loans over $250,000.00 or by loan officer descretion.  (For-closures and Sheriffs Sale acquisitions require Title Ins.)  Appriasla fee usually runs around $400.00 to $500.00.  Title insurance is based on the loan amount.  Attorney closing/ recording costs (?)
 
Q.  Can I borrow against equity on another property?
 
   A.  Yes, up to 80% of appraised value
 
Q.  How long do I have to own a property before I can borrow against it?
 
   A.  The Bank would evaluate the loan application based on loan to value ratio and cash flow. 
 
Q.  What are the typical loan terms?
 
   A. 60 months and balloon with payments based on a 15 to 20 year amortization, fixed for the first 60 months.  Interest rates are based on many factors to include credit, loan to value ratio, cash flow, compensating balances, and secondary source of repayment ability.  Range from 5.50% to 6.50%.
 
Monthly rental income should cover debt service and all other monthly expenses hazard insurance and property taxes. Minimum debt coverage ratio of 1.25 to 1.  
Bank will evaluate secondary source of repayment ability to include guarantors debt to income ratio.  A desired debt to income ratio would be 43% or less.  
 
If the property is in a designated flood zone, flood insurance will be required to be purchased prior to closing.  Hazard/Fire insurance is also required to be purchased prior to closing.  
 
 
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Thibodeaux Reed Realty LLC
120 Iberia St • New Ibera, LA 70560
Main Office (337)658-0181 • Rosalind 504-229-3460



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