Pre foreclosure and Short Sales as a RE investor

4 Replies

Hi to all, I’m in the beginning stages of RE Investing. Lately I’ve been receiving a lot of calls and quite a few good deals. However this one deal, I would like to buy and flip. What is the next step after me and the seller agree on a price? I have some financing such the FHA or convention loan (if necessary). Perhaps should i sign the contract and send it to the seller lawyer? Or should I contact my personal bank, and let them know the specifics. What exactly is the next step? Thank You in advance to all responses.

@Mike Larry What state are you in? It will make some difference as to whether you will be dealing with an escrow company, title company or law office for your closing.

You are attempting a short-sale on a pre-foreclosure property, correct? This is one of the more timely transactions. Short sales can take up to 3+ months to finalize. It is no easy task to complete. I would love to help you out but I need just a little more info.

Are you doing this off market or with a broker?

When is the foreclosure sale set for?

Have you and the seller agreed on a price? The seller may be on the hook for whatever the difference between what is owed and the price you agree upon. That is up to the bank if it will go after the seller for the difference.

Are you a cash buyer?

@Ryan Blake I live in NYC. Im working with a law firm. She owns the property out right. Me the seller agreed on 400K. I want to buy to live in/flip to the highest buyer. Comps are btw 550-600K...I was actually going to call a few hard money lenders on Monday. Overall I just want to make the most money from a deal by flipping instead of wholesaling

@Mike Larry That makes things much cleaner. I thought you were looking for advice on foreclosure or short sale. Just come up with an agreed price and since you are in New York you will close using a law firm. Depending on the length of time you can look into an FHA loan since you will be living there (I do not know the time you have to hold the property for). I would try to avoid the HML if you can because of the interest rate. If you have any W-2 income you will be able to get a better rate elsewhere.

@Ryan Blake I have to check the holding time via FHA. I can easily make over 100K on the deal. Therefore money is priority. One HML ask for 9%. I have good income & excellent credit as well. I’ll call a few banks on Monday. I have few properties I would like to wholesale in the meantime, what is the most successful way to find a buyer. When speaking with a buyer should I tell them I’m wholesaling or I’m the seller? Bc im noticing when I tell them I’m wholesaling the phone disconnects lol