short sale flipping = fraud?

Question

Not sure if this has been posted already, but this doesnt look good

link

Corry Taie · Answer

Ok. The bank will NOT believe the value we have so they do their own valuation (i.e. BPO or Appraisal). They then do a risk analysis & make an educated decision as to what they will or will not accept as a pay off. This figure is based on the value they get from THEIR OWN BPO or APPRAISAL.......... They are willing to accept an amount below their percieved value based on their own due diligence. If we resell at or below FMV & make a profit, there is nothing wrong with it. Disclosure is your friend in this situation. BTW the bank is NOT a principal in the transaction. They are simply a third party who has a loan that is collateralised by the property which they will take a settlement offer to release the lien on. No one is getting ripped off or defrauded. Only being helped. Please protect your birth right to free market capitalism, let people who dont "get it" know to get educated & get a clue. They only whine about it because they didnt figure out how to make a living at it. And what a living it is. 
                    
                    As always,
                    Enjoy & Happy Investing

Myka M. · Answer

It is funny how this article means a totally different thing to me.  What I see is:

How dare these people to come in here and make money when our best and brightest can't.  If we aren't making the profits then no one should!

This is what the story behind the story is.. if you can't get to the site:

Me- "Hey can I buy a piece of bubble gum from you for $1.00?  I see you have a warehouse full of it and no one is buying.

Mr Bubblegum Bank- Sure, I've been trying to get rid of this for a while.

Me- Thanks.  I don't like bubblegum but I have a friend here who loves it!

Hey Chewey, Want to buy this bubble gum for $2.50?

Chewey- Oh yes!  I have been looking for this gum everywhere!

Mr. Bubblgum Bank-
HEY!!! You are so evil!  NOOOO...How can you do this to me?

Me- Can I get two more packs?

LMAO!!!!  :joker:

Will Barnard · Answer

Your link does not come out right, here it is fixed:
[urlhttp://www.heraldtribune.com/article/20091115/ARTICLE/911151083?Title=The-new-flipping-short-sales&tc=autorefresh[/url]

This indeed has been already posted and talked about both in the forum and on the bulletins.

It is a very irresponsible (in my opinion) articel written with only acusations and assumptions. It also lumps ALL short sale investors into one classification - frauds which could not be further from the truth.

Are their some crooks doing it wrong? Of course. Are there thousands of others who do it legally and ethically? You bet. I know of many, including myself, you disclose to all parties and who do not use straw buyers or artifically inflate appraisals. We show real comps to the banks and ultimtaely it is their decision to accept or decline the offfer. Crying afterwards because we made a profit after providing a service to the homeowner (and not charging them for it by the way) is deserving of a profit. Just because it appears the profit was made the next day or shgortly after, does not mean that is the total time invested. Short sales often take over 3 months (sometimes longer) to complete. Making $10k-$20k on a deal after 4 months is only $2500-$5000 per month!

Just an overly opinionated artcile lacking real foundation or truth about the majority.

Corry Taie · Answer

Thanks Will. I am looking forward to doing alot more deals/ 2010 is going to be a great year in Short Sales. I just need ALOT more write offs!! lol

Marc Freislinger · Answer

http://www.heraldtribune.com/article/20091115/ARTICLE/911151083?Title=The-new-flipping-short-sales&tc=autorefresh

I'll try to help :)

Ryan Raak · Answer

good one nmbr1

Will Barnard · Answer

A most excellent analogy and post. Vote for you!

Bill Gulley · Answer

Hi, the daels I did in this arena were not structured as short sales are now and it seems to me that if you have the funds, your own money or any other funding to accomplish the purchase of a property from the owner with an agrred payoff from the lender, even if it is a discounted payoff, that that is the end of the deal. As the lender does their own due diligence as to what is in their best interest, their decission should be, "do we take this much and write off the rest?" I can also see the bank wondering if they should really take less since it's being sold to someone at a higher price. Seems that if I were to go to the bank with a buy and hold strategy, alot of this would be avoided. Any comments?

As to the article, totally slanted and irresponsible for the drama of selling the paper! Bill

Justin H. · Answer

This is the first post I've been able to find that brings up the "full disclosure" requirement. I want to do short sales the right way and the title company I want to work with says they are cool with double closings if they are funded separately (transactional funding) and there is full disclosure. In my A-B contract, I have wording about "buyer intends to immediately sell for profit" etc. They also say they will immediately share BOTH HUD1s with the short sale lender. Is this normal? Should I look for another title company?

Corry Taie · Answer

Thanks for that vote of confidence Will. I am certainly giving it 100%. Just picked up a $1M short sale. looking forward to that. Working on getting to 100 in the pipeline. Just dealing with the typical holliday slow down.

short sale flipping = fraud?

Most Popular Reply