BiggerPockets

The property has been sitting vacant, filled with mold and needs gutted. Loan balance is around 15k ARV 110k Repairs 50k

Is 15K a typo?

you said 15K after repair value????? I can't be reading this right. That has to be a mistake.

No... you are saying 115 ARV. Is 15k representing the asking price or you just know the balance? Is 50k an estimate from you or a contractor? When you say "get it reduced" are you talking about negotiating the price of the short sale down?

Do you have buyers lined up or are you purchasing for you?

Basically, after my authorization for release of information is received how do I present my case to the bank?

Actually, after reading that again:

You say shells go for 8-13k in that area.

So 50k in repairs will bring the value up to 115k?

I don't feel like 115k is correct, but let's say it is:

Why would you waste MONTHS trying to negotiate a short payoff if it's only going to bring you 5k-7k in extra profit...?

Why don't you just payoff the loan of 15k and spend the 50k to repair it. So the property cost you 65k, let's say 70k.

Then sell it for 100k and make yourself 30k.

Why waste months trying to get this property for 8k instead of 15k...?

I don't know what to say....something about these numbers just doesn't make any sense.

Can someone please tell Terry how ridiculous it would be for him to buy this as a short-sale, if he's going to make 30k in profits regardless...

Just tossing my $0.02 worth in here.

It will make money even if it is not shorted by the lender. The OP has never done a short sale. Put those two together and this is a good one to learn how to do a short sale. Can't really lose either way, and there is something monetary (and educational) to gain by shorting. There is time to lose by waiting out the short sale process though.

Terry-

How much to bring it current? Or how long to foreclose? You could sub2 it, save yourself some transaction fee's, closing costs, etc and do it that way.

But to answer your original question:

1. First, establish that the homeowner is in a hardship situation.

2. Gather the following documents from the homeowner: Last two years tax returns, last two paystubs (or proof and loss statements if unemployed, last two months bank statements, income/expense report, and a handwritten hardship letter.

3. Put the property under contract and create a preliminary hud-1. Submit a authorization to release.

4. Submit your offer at 50% of the price you'll pay for it.

5. When they counter you, submit your repairs estimates, photos, sex offenders, etc.

6. Call religiously every week for the next 3 months and hope they respond to you via email or phone calls.

7. When they accept, close the puppy out.

Do this for all mortgage on the prop. Good luck.