Buying investment properties after BK

[po man]

I am looking to pay out of my chapt 13 plan next month. I want to purchase a house just to fix and re-sell for profit. My current mortgage is being foreclose on and it is NOT a FHA loan. I have read about FHA requiring two years out of BK. Is this if you foreclosed on a FHA during BK or If you just filed BK in general you have to wait no matter what? I filed 12/28/06 and was just confirmed 8/07. Working on credit now.

[lrprn]

I am looking to pay out of my chapt 13 plan next month.

It isn't as easy as you saying you want to pay out of your Ch 13 next month. The old law allowed payouts after 2-3 years of on-time payments. The current bk law has no provisions included for early buyouts. No one has been in a Ch 13 for two years after the current law went into effect (Oct 17, 2005), so no one knows yet how the courts and trustees are going to treat early buy-out requests.

At any rate, I very much doubt that you will be given permission by your trustee for an early buy-out ten months after filing and one month after confirmation. Even under the old law that wouldn't fly.

What your trustee *is* going to ask you is how do you have the money for an early buy-out if you are turning over all disposable income now? And if all you need to do is buy up and resell some property, why didn't you do that instead of filing Ch 13 less than a year ago?

[HHM]

I think the time line for FHA is 2 years from BK, regardless if their is a foreclosure.

Your other option is to simply dismiss your chapter 13 case. But, you would need to speak to a lawyer to find out all the ramifications of dismissing your case.

As lrprn has already noted, it is highly unlikely they would let you buyout your 13 under the circumstances. If they let you buyout at all, you have to pay off 100% of what you owed to unsecured creditors. (now, if you are already in a 100% payoff plan, that may be no big deal, but if you are not, assuming they would let you buyout, you would have to payoff 100% of what you owed).

[Boscoe]

I agree with the 2 experts above, and will add this.

Why, in the lord's good name, are you even contemplating a purchase of investment property "to resell at a profit" in this market? Do you really think you can buy something now and then sell for a profit in 2 years?

You are going through probably the worst financial time of your life (as we all are). Paying 6 figures for a piece of real estate that is highly unlikely to appreciate is.............well, nuts.

Not sure you have ventured into the wonderful world of real estate before (I have, which is why I am in this mess), but the costs of carrying real estate are large, and never stop until you unload the property (or file bk like me).

You should start our slow, like buying 100 shares of Coca cola or something.....Or better yet, open a CD at 5.5%.

[po man]

As noted in http://www.bkforum.com/showthread.php?t=12136

I only owe approx 1000.00 in my ch 13. I have already been told I can request a pay off.

I am better off than ever before due to filing and the help from you guys on this forum.

[Boscoe]

Ok, Po Man. But stay away from the investment properties or you will be a "po man" for alot longer time period!