BiggerPockets

There are a lot of people in this forum that seem to make short sale wholesales happen.

However, I do short sales from the agent side, and i don't see it happening. Especially for a new investor.

We wholesale short sale properties all the time. But, we first buy the property and then sell it later that same day. We also do not get the properties from the MLS. We go directly to the homeowner. Also the end buyer might have issues with seasoning. The only way is to be upfront from the start.
I also must agree, this is not a process that you will want to get into without either experience or help from someone whom has the experience. But by all means YES you can!!!

Also the end buyer might have issues with seasoning.

Amen. I'm guessing that statement encompasses 95% of short sale wholesale problems.

Actually "seasoning" is not really a problem to often. If you state from the beginning No Fanny/Freddy it wipes out most of the problems.

If ya'll are interested in the steps, I will be more than happy to help, but on a public offering only. That will ensure that multiple people can get the info at a time, not just one/two.

Crosswind, I would certainly be interested in hearing anything you have to say about it, and it seems that others would be also.

I'm just trying to get started in this entire thing myself, and I can certainly understand why the more experienced folk would discourage the unexperienced from using this strategy, but my concern is what happens if I market to motivated sellers, and I get a call that is a perfect candidate for this? Then what? Either let the deal pass, or learn quickly and carefully. Speaking only for myself, I'd have a hard time letting any potential deal pass, for a number of reasons, not the least of which is how desperate I am to get my first deal out of the way. So, with that being said, I'd appreciate any info I can get.

Jeff

Hello CrossWind,

the complete steps for #'s 1-3. Thanks

Well, I guess the issue is why are new investors discouraged from trying this strategy? What is the difficulty compared to a normal wholesale? Is it just a matter of finding the money to close on the short sale, and then being able to sell instead of assign to the end buyer? If so, then it would seem that the only problem is that the beginner trying this better make darn sure that he has a deal, but that doesn't seem like a problem to me because the hard money lenders that I've spoken to have said that they analyze the deal themselves, and wouldn't lend in the first place if they don't like it.

Is it just a matter of seasoning? Because I was only planning on wholesaling to end buyers using hard or private money anyway, so I don't see the issue there. The seasoning issue becomes their problem, and I'd imagine they would know how to deal with it.

Basically, what is it that I should be aware of that can make doing it so difficult that it's been suggested that a beginner should think twice?

I want to answer a few questions before I start.

Earl Gray- I have in fact assigned one(1) contract. It was through Citi Residential. I was told that the assignment fee could not exceed 4% (which happend to be the amount they would allow to go to a realtor. We don't use a realtor to buy so no commissions were coming out.) It did work, but I have never even tried it since. I hear people say you can/can't. I only know it did work for us once.

Jeff Z- I don't know why people tell new investors not to try short sales. I do not think they are hard. Just takes time.

Note- We are not realtors. We buy properties through short sales. We close the deal than sale the property. We do not use realtors to purchase properties or find the homeowners. In fact, we wil not persue a deal if the property is listed.

1)Marketing to homeowners- We go online to our local clerk of the courts to get the filings of the lis pendens. EVEREYDAY. This info is the homeowners name/lender(s). We then go to the county property appraiser and use the name to get the property address. From there we send out a letter direct to the homeowner. It says, Hello________, I would like to talk to you about buying your home. If your are interested call__________. That is it! Then they call.

2) We first ask, Is the property listed with a realtor/ or are you working with a realtor? IF YES, than sorry we do not go that route, I am sorry for the waste of time. IF NO, than we tell them that we are an investment company that buys properties. We usually buy them trough "short sales." Are you interested in selling? If yes, I then tell the homeowner that I need to drive and look the property over. When is a good time for me to see the property? While I look over the property, I explain what a short sale is. I also tell them how it is not guaranteed that the lender will allow it, can't know without trying. Also, there is alot of paperwork that goes along with the short sale, are you willing to help gather all the needed paperwork? If YES to all questions, than I set an appaointment to come out and sign a contract and gather ALL the paperwork. I leave the homeowner a list of what is needed. And some other paperwork explaining what to expect and it also answers alot of other questions.

3) We return for the "contracts" visit. (Note, I call the day prior to the appointment and ask if they were able to get all the needed paperwork? IF not we go over why and how we can get it.) At the appointment, we sign the pruchase and sales agreement (here in Florida we use the FAR/BAR), and all the other paperwork is gathered. We then return and contact the lender that day. We then start the short sale process.

This is it for now, I will return later and give out more details. I truly hope that this will help. Please remember, this is how we do the process.

Crosswind!! This is a Great pointer for Beginners like me.... Thank you very much... This is beyond Help! ;-)

Cheers
Ram

Thanks crosswind, that is great.

I have read about short sales but never seen a nice list of the steps like that, much easier to understand.

Couple questions, does the bank at some point want to qualify you as a buyer, and what do they look for?

Thanks, Scott