BiggerPockets

Do I need to add myselft to title if I want to flip (do a doble closing A to B and B to C) on a short sale? Im thinking that in order for my end buyers lender to work on the loan they have to see me (the seller on the B-C transaction) on title. Im in California.

Im in LA county. I dont think a LOE will do it. But thats what Im trying to find out. Yes, Im gonna have to use a transactional lender because I dont have the funds to close the A-B transaction.

Hmmmm...California the once125% LTV state.

I'm curious as to why a lender would accept a short sale contract containing an "or assignee or subject to" provision? These guys are wanting to maximize profits. I hate to rain on your parade but simultaneous closings on short sales is a real stretch.

I'm not saying it's totally impossible but, I have never heard of it thru traditional lending. It may be possible with private money on a rehab.

The first issue is the fact that it's short. Where's the profit to fund the transaction. If there's profit the current lien holders are going to want it. In most cases they won't allow an existing owner to make a dime.

As for the new lender....If the property doesn't meet value, traditional lenders won't loan enough on the transaction to create a profitable spread.

The second issue that comes to mind is schedule "A" on the title. Schedule "A" will need to show you as owning the property before you can sell it. You can't sell a property that you don't own. If you add your name to the title prior to the end buyer you become subject to the no profit rule.

Is the buyer selling short due to an upcoming foreclosure? How much time do you have? Does the property need work? How else can you make money in this transaction?

Check with some of the pro's in the short sale forum. Off the top of my head....I may be wrong but, personally, I don't see how you can legally flip a short sale for profit using traditional lending.

When you use a land trust the land trust will be listed as seller so, the P & S agreement that yoiu have with the end buyer will also show the land trust as seller. The end buyers lender does the title search they will see the land trust has owned the property for more than 90 days. You can buy the beneficial interest from the seller the same day you sell to the end buyer. I am acually putting together a course that gives a step-by-step instruction on how to structure these deals and you will have to have transactional funding (which I do) because you cannot use the funds from B-C closing.

Yes, by filing an option contract you would have legal and equitable title to the property that you plan to purchase. It is necessary to do this in order for your B-C lender to approve the loan. You have to use a conventional lender that has not seasoning requirements. But if you file early, you might have 2-3 months on title before your B-C closes. Yes, you have to use transactional funding because of the end buyers desire to close with a loan. If the B-C was a cash transaction, it would be different. I have NOT completed a transaction in Cali, I can tell you just from my experience in the Midwest. I hope that helps.

Seasoning is a whole topic on its own. If the end buyers lender has a seasoning requirment or the bank (A) has a no re-sell clause, such as B of A and now Wells Fargo, you have to wait it out and thus, have enough room in your deal to pay the holding costs.

For same day closings, just bring the cash to clos ethe A to B.

Will B

The Option Contract is effective for disclosing to all parties that you intend to resell and creates an equitable interest allowing you to market or list the property. Jodi, what has your experience been regarding banks accepting your offers when submitted under a land trust?