Should I be Investing with a Time Machine?
Now that I got your attention, let's talk about Short Sales and whether/when they are a good fit.
First, some context:
A Short Sale is when the NET proceeds from a Real Estate SALE will fall not cover the DEBTS secured by the liens against the property. If ALL of lien holders agree to take a lesser amount than what is owed, the sale will proceed.
So... If the homeowner is too far behind in their payments to catch up AND the home is worth less than the mortgage because of the market value.
The big thing is that a Short Sale is initiated by the homeowner/seller BUT has to get the lender to agree. A Foreclosure is the Lender/Bank has taken ownership of the property and now controls it, seeking to get back as close to the original loan amount as they deem appropriate. Now...
To my question/topic of discussion.
Since Short Sales take SO LONG to simply get an answer back to an offer, Is there a time when it's appropriate to pursue a Short Sale knowing and/or hoping another deal will pan out and provide the capital to close on a SS if the offer is accepted in the future, preferably when the market has risen a bit and I've hopefully locked in a past price? Like investing with a Time Machine.
Current Example: In approximately 6 months, I will have proceeds from a flip. If I come across a good deal that is a short sale, where the down payment on the offer I make will be covered by my current flip proceeds [assuming the bank and seller give the thumbs up], is their any harm in making the offer now?
As always I look forward to your thoughts!