I have a realtor that sends me 100s of shortsales, preforeclosures, foreclosures, etc. from 3 different states and I simply don't know the best way to wholesale the properties once I get the banks approval of the ss.
I also have an owner/landlord who wants to sell me his house which already has tenants in the house and wants to stay and keep paying rent. I never expected so many leads only after 2 weeks of investing. I desparately need advice from some of you pros on the best exit strategies for someone like me with no cash.
You may have to explain it to me like a 2 year old since I am so green. Make that a 2 week old.
:D
Honestly, my first question: Are you sure that every one of these properties are investor grade deals? Deals with at least 25% equity after repairs or a little less equity, but cashflow well positive?
I have not had time to assess the deal properties yet but I specifically told my realtor what I was looking for in terms of DOM (at least 90 days), expired listings, fixer-uppers and shortsales. She has worked with other investors before so she has a feel for what investors are looking for. I also told her what I think my exit strategy would be and she sent me properties that would be candidates.
I gotta believe that there are some really good deals in the lists that she sends, again for 3 states and is updated daily. In my inexperience, I just don't know what to do with them. Is there a legal and proven way to wholesale shortsales and if so, how?
As mentioned above, make sure that the deals really are deals with comps, and analysis of each property. Do it through zillow, trulia, realquest, etc. Then find out who the owner is and get an option to market the property and sell your option. Its awesome that you are jumping in and really doing something, so many newbies just don't.
If they are good deals then I would
recommend networking with other
investors who may be interested in
the deals and types of property that
you have for some investing.
Thanks for the replies guys. So I can network at an investment club in my area. Let's say I have buyers interested in my shortsale properties. How do I wholesale the shortsales to them? How do I provide Proof of funds when I currently have none? Is there a process to wholesale a shortsale?
For what it's worth, in my opinion, 100s of listings that get sent to you from three different states does not indicate "tons" of good deals. To me, it indicates a big opportunity to be the greater fool.
I suggest you pursue the landlord. I would get as much information about that situation as possible, post the info on this thread, and then have experts guide you through whether it's a good deal or not.
Information to gather:
Gross Rent
Expenses
Price
Financing Options
repairs needed
copies of leases
management agreements
comparable properties for sale
comparable properties sold
etc...
I would do this as a learning lesson to start getting your hands dirty.
Web you cant do a true whole sale deal with a short sale by that I mean assigning your contract to your whole sale buyer. What you need to do if get a really good deal from the bank and close with them 1st then sell it to your whole sale buyer that same day for 10-20K more depending on the deal. I would do google short sale funding.
When you doing a Short Sale there typically 2 parts to the SS, which allows you to make a nice Spread. This is how it was explain to me when i first got into SS. The process is A-B and B-C.
A - Seller ( Banks)
B- You or Your Company or whatever you put on the contract to buy the property from the bank
C - The End buyer
In Part 1
You (B)will buy the property from the bank (A)Cash. Usually this is funded through a hardmoney lender, hence the Short Sale Funding. They will typically borrow you the money for 1 day and will charge you between 2 - 10 points on the money they borrowed you. All they ask to fund the 1st half of the transaction is to see the Ender Buyer Commitment letter to purchase this building from you. Once the funded this part you temporarily become the owner, which allow you to sell the property in Part 2 of the Transaction
Part 2
Here you have to decide whether you will selling the property in a Land Trust, Double Closing, Assignment Contract or an option Contract. I've used all them and they all work the same you jst have to have an Attorney and/or title company know what they are doing to do this transaction. What each those option above allows you to be owner of the building for about 2hrs and flip it to your end Buyer (C). And this how to do a SS and that is why you use a SS funding Source.
Also
Based on my experience I dont think this Website are Accurate when it comes to Value. I work in Chicago where you have Condos, SFH and MU building in the Same area. And often these website give you sold comps and you really dont know the type of building or condition that they are giving you as comps. Best bet is get a good Realtor who knows the area you are working in to give you comps.
Aug 05 '08, 06:30 AM
