Are you guys still getting the 82%-85% discount...?

Question

I'm getting really close to the exciting part of a WaMu short sale.

Are you guys still getting properties at 80%-85% of BPO with your cash offers?

Will Barnard · Answer

Getting discounts off the BPO is step two, getting the BPO discounted from market value is the real gem and step 1.

Scott Hubbard · Answer

80 to 85% pretty consistently.  Getting deeper discounts for properties with deficiencies.

Dave Grosse · Answer

doesn't it all depend on who the investor is(the one holding the paper)?  Honestly, so far I'm a failed short sale investor.  I've only had a few deals actually make it to the real negotiation phase and they've all been FHA, VA or Fannie/Freddie loans.  even between all of those ding-dongs, they all have different guidelines for what they will accept.
          
          For Instance, a VA loan decreases what % of teh BPO it will take as time goes by.  I don't recall exact dates or %'s, but my most recent deal went from 86% to 84% to 82% depending on when the closing would take place - all withing 3-4 weeks of each other.  
          
          From what I have learned so far, private investors may be willing to take bigger hits, and this is where we can make the really big deals happen.  The other guys are so big, they can afford to hold out longer and take the property back if they don't like what they get on a short.  If you can't meet their minimum requirements, then move on or find some other exit strategy. 
          
          I've also heard to start your offers at 55-60% of FMV, sometimes people start out even lower.  
          
          Will- I know you probably have some tricks up your sleeve for getting the BPO to come in where you like it(step 1) - would you mind sharing one or two?

Dave Grosse · Answer

yeah this a good discussion, especially for me as a newbie ss investor.  I'd like to hear from seasoned investors still getting them done as to HMann's concern that investors aren't getting discounts off of the BPO - that was the concern correct?

Account Closed · Answer

I have my own team of negotiators who will do all that stuff for me.

But I was taught to start my offers to the bank at 55% - 60% of FMV.

And, first, only offer to buy short sales that are older than 90 days - for best results, because in the first 30 days the banks will only give the houses to you at 90% of FMV.

Darryl  Dean
Wholesale Houses Austin

Taylor C · Answer

Some great information here.

In some cases I've seen, the lenders ignored the BPO and listed it 30% higher than the BPO.

Rules of thumb are very helpful. To be safe though, each property has to be its own business case.

Thanks for sharing!

Herm M. · Answer

Can we get some more input on this topic?

Justin and I were just having this conversation, and he's saying that it's getting increasingly difficult for investor's to get ANY type of discount.

What's everyone experiencing right now, and with which lenders?

Also, are you guys seeing varied results depending on whether you submit your offer in a corp. name or an actual person's name...?

Herm M. · Answer

^Exactly.

As investors, our goal is to get the BPO at 90% of FMV.

Then get the property at 80-85% of BPO.

Caleb Whitney · Answer

Are you saying 80-85% off BPO.  Ok, so at what % below FMV are the BPO's coming in at?  That is the most important question.

Are you guys still getting the 82%-85% discount...?

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