buying upside down properties

[Michael C Gregory]

If you see a property owner who is in trouble, and let's say his loan is for $200,000, and the ARV is $180,000. And you want to offer him $117,000. How does this work? Will the deal have to go through a Short Sale specialist? If he agrees to the deal, what happens to the balance ($83,000) of his loan?

Thanks.

Michael C. Gregory

Remedy Investments, LLC

[Mike H.]

Yea. And let me be clear. I don't do any direct marketing at all. So I don't target people and convince them to do a short sale. The only short sales I've ever bought are ones that were listed on MLS.

That being said. Why in the world would you think a short sale is somehow worse for a seller than a foreclosure? Thats just being mis-informed there.

In terms of whether a wholesaler or investor or realtor is doing a short sale out of the goodness of their heart, thats not what anyone is suggesting either. If they were, then they would donate their fees/profits every time.

But that wasn't the issue I was addressing nor do I think there's anything wrong with people making money AND helping out the seller.  The fact remains though that a short sale is HELPING a seller out.  The alternative to a short sale is losing their home and getting hit with a foreclosure and the bank possibly coming after them for the full amount of the deficiency amount.

In a short sale, that can all be negotiated. Seller avoids the foreclosure so they can qualify to buy a home sooner. Seller can negotiate a deficiency only OR no deficiency. Seller can make sure that the govt extension for not paying taxes on a deficiency or still in place and not have to pay any taxes on it and they make out like bandits.

Either way, taxes on a deficiency are going to be a lot less than if the bank comes after them for the full deficiency amount.  

So I don't see how its even remotely possible that only the investor is the only one "that is helped" in a short sale.  That statement is categorically incorrect......