Short sale Questions....

Foreclosures
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Short sale Questions....

Dustin Lyle
Investor · Clarksville, TN · Member since 2008 · 122 posts · 53 votes

Im assuming this question has been beat into the ground but I cant seem to find it yet so here goes...

(THE STORY)
The HO Purchased a home 10 years ago for 88K, 2 Years ago (after watching Flip this House) it was semi-gutted in prep for a rehab BEFORE getting an appraisal to refi to fund the rehab. tisk. tisk. The HO was unable to fund the rehab thus leaving the house unlivable. Loan balance is 70K. House has been on the market for 6 months at least, first At 86.9k, now at 78.9k. Word from my appraiser on drive-by and comps as well as the agents Competitive Market Analysis puts this house between 138k and 150k IF REHABBED. A walk-through with my contractors puts this house in supreme condition with 40K.

(THE QUESTIONS)
1. If I can substantiate reasoning to his bank that selling short on the house will still be profitable to them, and only help them, is there a way for them to "write off" the loss... without the current HO still being liable for the difference?

2. Is it at all possible to purchase a mortgage, that's in GOOD standing, from a bank for a discount on principle? IE offering the bank 55K for the 70K note, settling at or around 60K, then as the note holder, me personally giving him the opportunity to walk away free and clear?

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  • Dave P.
    Real Estate Consultant · Member since 2008 · 792 posts · 30 votes
    17y

    A short sale is certainly a viable option. It is possible that the bank not seek a deficiency judgment against the HO but you won't know until the very end of the process.

    Who services the loans?

    A short refi is not likely.

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  • Dustin Lyle
    OP
    Investor · Clarksville, TN · Member since 2008 · 122 posts · 53 votes
    17y

    The Mortgage is through Chase, Over the course of 10 years he has paid them 57900... 18000 of which was principle.

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  • Dave P.
    Real Estate Consultant · Member since 2008 · 792 posts · 30 votes
    17y

    Will the seller cooperate with you during a short sale?

    In other words, will she give you the data that you will need to negotiate with the bank:

    -W2s
    -bank statements
    -hardship letters
    -loan statements
    -etc....

    If so, myself (along with others) will coach you through the process on this forum if you decide to proceed.

    Let me know.

    0Reply
  • Dustin Lyle
    OP
    Investor · Clarksville, TN · Member since 2008 · 122 posts · 53 votes
    17y

    Im sure he will... Im gonna run it by him this afternoon and let you know.

    0Reply
  • Dustin Lyle
    OP
    Investor · Clarksville, TN · Member since 2008 · 122 posts · 53 votes
    17y

    I dont think this deal is going to get as far as contract... the seller said he's not taking a loss.... and is convinced there is no way possible for a bank to take less than what principle is owed. I assured him it happens all the time... But I do live in Kentucky where old ignorance THRIVES. As much as I try, some of the older folks around here cant learn new tricks. Thanks for the help though... PS I still do need to get deeper into the short sale strategy, wheres the best place for that info without bothering people with my beginner level questions. Not that I don't appreciate all the help I've received thus far.
    Thanks again,
    Dustin

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  • Dave P.
    Real Estate Consultant · Member since 2008 · 792 posts · 30 votes
    17y

    Too bad. He's wrong.

    Keep on trying!

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  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    17y

    Do a search on this topic. There was a poster who laid out the entire process in detail. It was quite good and complete.

    Podcast Guest on Show #130
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  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    17y

    I found the thread, here it is:

    http://biggerpockets.com/topics/24724-can-a-short-sale-be-wholesaled-?page=2

    Podcast Guest on Show #130
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  • James Ward
    Real Estate Investor · Ocala, FL · Member since 2008 · 742 posts · 463 votes
    17y

    Dustin- I have ran into many people just like you. Also like you, I live in a huge horse area (Ocala, FLorida). You might try this. Sit down with the homeonwer and provide paperwork that shows what short sales are. Explain it to them fully. Than ask if you both can call the lender, put the call on speaker phone, and ask the lender do they allow short sales. Hearing it from the lender for themselves, helps more than you can believe.

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  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    17y

    Great advice to educate the possible seller.

    Podcast Guest on Show #130
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  • Rich Weese
    Real Estate Investor · the villages, FL · Member since 2008 · 5k+ posts · 3k+ votes
    17y

    I've been buying foreclosures here in Texas for over a year and have been happy with results. Are thee any Texans out there having success with short sales? Our total foreclosure time of 21 days seems an insurmountable obstacle. Any Texans succeeding at this? How do you find info , and get answers in 21 days?

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  • Dustin Lyle
    OP
    Investor · Clarksville, TN · Member since 2008 · 122 posts · 53 votes
    17y

    Thanks for all the insight!!
    Dustin

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