Washington State House Flipping: The 90 Day Flip Rule

April 25, 2012
Last updated:
December 4, 2021
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Are you thinking of buying property in Washington State to flip it and turn a profit? Right now house flipping has become a trend in many cities as a quick way to make money in this harsh economy. If you are considering this risky endeavor, there are some basic rules you need to adhere to so you do not lose money.

The 90 Day Flip Rule

Before you buy and flip a house, it’s important to understand the FHA 90-day flip rule. The reason why this rule exists is to prevent any possible fraud by people who artificially inflate the price of homes, which can have a direct impact on the housing market. Many flipping schemes involve appraisers and other industry professionals that make use of false information to carry out the transaction. In order to regulate this industry, a rule is in place that prohibits homes from being flipped within a certain time frame.

The FHA flipping rule is broken down into two time periods:

0-90 days – The FHA does not allow the financing of properties considered a flip that are less than 90 days from the date that the deed was recorded. Certain exceptions apply to this rule, but for the most part, house flippers must wait at least 90 days after buying the house before they can flip it for a profit.

91-180 days – After a property passes the initial 90 days, the next 91 to 180-day period allows FHA financing, but there may be a possible second appraisal needed before the FHA allows a buyer to buy it. If the resale is between 91 to 180 days and the new purchase price is 100% or more over the price that the flipper paid for it, for instance, a second appraisal would be required.

Budget Your Flip

Nobody going into a flip ever expects to increase their budget for renovations, but it happens almost every time. If your budget is limited to a specific number, make sure to plan accordingly. If, for instance, your absolute maximum is $50,000 then only plan to use $30,000 of that money and leave the rest for unexpected repairs.

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Plan Your Open House Wisely

If you have an end date in mind for the sale of the house, plan your open house accordingly. If you need to sell your house by the 15th, do not plan your open house for the 14th and hope for the best. Give yourself plenty of time to have the open house and entertain multiple offers. Also pay attention to other open houses in the area to determine of there are any houses for sale in direct competition with your home. If there are homes for sale that are less expensive than yours in the same areas you may want to revisit your asking price.

Whether you are a first time flipper or a veteran with several properties bought and sold under your belt, it’s important to pay attention to the climate of the housing market of the area you want to buy in. Also keep in mind which Washington and Seattle mortgage company would be best to use as a lender. When determining how much time to give yourself for the flip, always expect the process to take longer if you are a Washington State first time home buyer.

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Have questions about Flipping a House in WA State?

Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We serve the entire state, as well as the broader Pacific Northwest region that includes Idaho, Colorado, and Oregon. We offer a wide variety of mortgage programs and products with flexible qualification criteria. Please contact us if you have mortgage-related questions.

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