You just got a great deal on a foreclosure or short sale property in Prince William County. You brought in your crew to renovate and now it is ready to go back on the market. But who can you sell it to?
Recently my buyers have encountered two properties in Woodbridge that were pristine and within their price range. They were excited and ready to write an offer. However both properties were flips and didn’t qualify for FHA financing.
Since a large percentage of buyers in our area, especially at the lower price points are using FHA loans those newly purchased and renovated properties are not available for them to buy. When you look back at the month of March of the 750 properties sold in Prince William County 257 of them were purchased with FHA loans. So close to 1/3 of the potential buyer pool in the county can not purchase a flip.
Even though the FHA changed the rules last fall to provide relief for lenders handling foreclosures it does not cover individual “flippers” who purchase properties to rehab. In an area such as Woodbridge this can be a surprise to both the investors, listing agents and prospective buyers.