Need Short Sale Mentor - I have a deal
Rental Property Investor · Wichita, KS · Member since 2018 · 52 posts · 33 votes
Hello and thanks for reading!
I am located in Wichita, Kansas and I think we have a potential short sale opportunity
The seller has a very nice home that is worth $249k and she owes 165k. I believe she is 65k delinquent. She had gone into foreclosure on the property a couple years back but the judge somehow overruled it. I think that is why her back payments got so high.
Anyways , I have done flips and rentals but I am not educated in this area but I would like to partner with someone who has experience working with banks. I would feel so bad if the seller lost everything.
This is not a short sale......the home value is more than the mtg.
@Derek Blades I work with James Hoffman at Heartland bank. He works with me on my LLC but he owns and flips also. I'm no good to you on this but he may be able to help you.
@Robert Burris
Thanks Robert.
Your right. Maybe talking with a banker would be a good place to start.
As far as Nick goes, four different friends of mine as well as myself have had negative experiences trying to work with him.
@Derek Blades who is Nick I will avoid him.
@Robert Burris I meant James. Sorry.
This is not a short sale......the home value is more than the mtg.
@Derek Blades ok. I have only used him for 1 deal. He seems to know his stuff but I understand some issue. I will be setting up other loan options just to have other options. Good luck with that short sale. If you can let me know how it goes I'm just learning all this.
@Robert Burris
Why no James is partnered with security first title because I see him at all the options. Who knows maybe he just didn’t work for the deals that we were doing.
Also I’ve found out that banks are not inclined to take short sales with that much equity in the deal. They would rather foreclose and sell the property themselves
@Derek Blades I can see that. Hopefully one of the other guys on here gets you a better option.
@Derek Blades this was painful to read. This isn’t a short sale
@Account Closed You should really discuss this deal with a real estate attorney or you should try networking with other realtors at your local REIA meetings. This is not a short sale opportunity because the property owners owe less than what the property is worth. It would be ill-advised to go any further with this deal before educating yourself on the subject first!
Good Luck!
@Account Closed You should really discuss this deal with a real estate attorney or you should try networking with other realtors at your local REIA meetings. This is not a short sale opportunity because the property owners owe less than what the property is worth. It would be ill-advised to go any further with this deal before educating yourself on the subject first!
Good Luck!
Thank you. I very much agree, you’re right. Going to look to take on a partner with more knowledge on this deal.
@Derek Blades how would this home qualify as a short sale? Home is worth significantly more that what it is owed. Bank would never approve this.
@Account Closed - I reread your thread - I think some of the others that responded haven't looked up the true definition of a "Short Sale" - it's simply getting the bank to agree to sell the property or their interest in it for less than what is owed - has nothing to do with what the property is worth.
So yes - that would be an option as it would allow them to avoid the lengthy and can be costly foreclosure process. There are redemption periods in KS and a whole host of other things the bank takes into account.
As I alluded to in my message it all depends on who the bank is - if it's smaller or more local or regional there's a chance you can get somewhere - if it's a large national bank or huge mortgage lender then your options are likely going to be more limited - but I wouldnt despair as there would still be other options such as securing redemption rights if the bank forecloses etc.
I've not completed a short sale purchase as I got tired of the time it took (wished I would have waited as long term it would have turned into a good deal for me - but live/learn) - but have completed the whole purchase redemption rights, redeem a foreclosed property etc. Would love to help.
The way to start is getting ahold of some of the foreclosure docs/case file (if there was a previous foreclosure) you should be able to find the case # and go down to the courthouse and get ahold of it - they used to email those out but not sure if they still do. I have the # to call down at the courthouse saved in my phone. If you have a relationship with the seller you should be able to get some of this information. In KS depending on how long someone has lived in the house and how much they have paid off of the original principal determines how long a redemption period the present mortgagee would get by statute. Anyways - lots of moving parts but simple enough to figure out with the right info. If it's as advertised seems like a great opportunity.
Or if there is truly that much equity in the house just purchase outright from her at a price she deems is fair etc -- multiple multiple ways to skin a cat or in this instance solve a problem.
@Account Closed - I reread your thread - I think some of the others that responded haven't looked up the true definition of a "Short Sale" - it's simply getting the bank to agree to sell the property or their interest in it for less than what is owed - has nothing to do with what the property is worth.
So yes - that would be an option as it would allow them to avoid the lengthy and can be costly foreclosure process. There are redemption periods in KS and a whole host of other things the bank takes into account.
As I alluded to in my message it all depends on who the bank is - if it's smaller or more local or regional there's a chance you can get somewhere - if it's a large national bank or huge mortgage lender then your options are likely going to be more limited - but I wouldnt despair as there would still be other options such as securing redemption rights if the bank forecloses etc.
I've not completed a short sale purchase as I got tired of the time it took (wished I would have waited as long term it would have turned into a good deal for me - but live/learn) - but have completed the whole purchase redemption rights, redeem a foreclosed property etc. Would love to help.
The way to start is getting ahold of some of the foreclosure docs/case file (if there was a previous foreclosure) you should be able to find the case # and go down to the courthouse and get ahold of it - they used to email those out but not sure if they still do. I have the # to call down at the courthouse saved in my phone. If you have a relationship with the seller you should be able to get some of this information. In KS depending on how long someone has lived in the house and how much they have paid off of the original principal determines how long a redemption period the present mortgagee would get by statute. Anyways - lots of moving parts but simple enough to figure out with the right info. If it's as advertised seems like a great opportunity.
Or if there is truly that much equity in the house just purchase outright from her at a price she deems is fair etc -- multiple multiple ways to skin a cat or in this instance solve a problem.
After going to inspect the property in person it seem to be worth about 220k . She is stuck on getting 220k because she believes it is worth 250k.
I want to offer her 180 which would leave her 20k after her preforeclosure balance is paid off.
My numbers would look like this
217 sell price - 13k realtor fees - 8 in repairs ( finish the basement) - 180 purchase price = 16 k profit
I really like your idea to buy redemption rights
@Account Closed - I reread your thread - I think some of the others that responded haven't looked up the true definition of a "Short Sale" - it's simply getting the bank to agree to sell the property or their interest in it for less than what is owed - has nothing to do with what the property is worth.
So yes - that would be an option as it would allow them to avoid the lengthy and can be costly foreclosure process. There are redemption periods in KS and a whole host of other things the bank takes into account.
As I alluded to in my message it all depends on who the bank is - if it's smaller or more local or regional there's a chance you can get somewhere - if it's a large national bank or huge mortgage lender then your options are likely going to be more limited - but I wouldnt despair as there would still be other options such as securing redemption rights if the bank forecloses etc.
I've not completed a short sale purchase as I got tired of the time it took (wished I would have waited as long term it would have turned into a good deal for me - but live/learn) - but have completed the whole purchase redemption rights, redeem a foreclosed property etc. Would love to help.
The way to start is getting ahold of some of the foreclosure docs/case file (if there was a previous foreclosure) you should be able to find the case # and go down to the courthouse and get ahold of it - they used to email those out but not sure if they still do. I have the # to call down at the courthouse saved in my phone. If you have a relationship with the seller you should be able to get some of this information. In KS depending on how long someone has lived in the house and how much they have paid off of the original principal determines how long a redemption period the present mortgagee would get by statute. Anyways - lots of moving parts but simple enough to figure out with the right info. If it's as advertised seems like a great opportunity.
Or if there is truly that much equity in the house just purchase outright from her at a price she deems is fair etc -- multiple multiple ways to skin a cat or in this instance solve a problem.
I think you are confused. Your definition is flawed to start. Selling the interest in the note has nothing to do with a short sale and, the bank (lender/servicer) doesn't sell any property they don't own. A short sale requires bank approval of the borrower, selling for less than payoff. A bank selling a note short of payoff happens every day and has no bearing or impact on the borrower's continued obligation other than where to mail their payment to the new servicer/lender/bank/owner.
Also, "who the bank is" (or the size) has nothing to do with whether or not the bank has any propensity to approve a short sale or not. Yes, if its a small bank and if its a portfolio loan, probably, maybe, the bank may be easier to work with but considering about 70% of the mortgages out there are Fannie/Freddie, those must be approved by Fannie/Freddie. If this particular loan isn't a GSE loan, again, yeah, maybe a small local or regional bank might be willing to cut through some red tape. Odds are against someone though that this would happen.
Finally, the "length of time the borrower has lived in the home" has nothing to do with redemption rights in KS. The statute states if the borrower has paid less than 1/3rd of the original mortgage amount, the redemption period is reduced to 3 months, otherwise, it is generaly a 12 month right of redemption.
So...no...that wouldn't be an option based on what the OP wrote. As others wrote, the property is worth more than what is owed and as a result, and as others have stated, it isn't a short sale (based on what the OP stated). What the property is worth is a factor the bank considers when reviewing a short sale.
@Account Closed - I reread your thread - I think some of the others that responded haven't looked up the true definition of a "Short Sale" - it's simply getting the bank to agree to sell the property or their interest in it for less than what is owed - has nothing to do with what the property is worth.
So yes - that would be an option as it would allow them to avoid the lengthy and can be costly foreclosure process. There are redemption periods in KS and a whole host of other things the bank takes into account.
As I alluded to in my message it all depends on who the bank is - if it's smaller or more local or regional there's a chance you can get somewhere - if it's a large national bank or huge mortgage lender then your options are likely going to be more limited - but I wouldnt despair as there would still be other options such as securing redemption rights if the bank forecloses etc.
I've not completed a short sale purchase as I got tired of the time it took (wished I would have waited as long term it would have turned into a good deal for me - but live/learn) - but have completed the whole purchase redemption rights, redeem a foreclosed property etc. Would love to help.
The way to start is getting ahold of some of the foreclosure docs/case file (if there was a previous foreclosure) you should be able to find the case # and go down to the courthouse and get ahold of it - they used to email those out but not sure if they still do. I have the # to call down at the courthouse saved in my phone. If you have a relationship with the seller you should be able to get some of this information. In KS depending on how long someone has lived in the house and how much they have paid off of the original principal determines how long a redemption period the present mortgagee would get by statute. Anyways - lots of moving parts but simple enough to figure out with the right info. If it's as advertised seems like a great opportunity.
Or if there is truly that much equity in the house just purchase outright from her at a price she deems is fair etc -- multiple multiple ways to skin a cat or in this instance solve a problem.
I think you are confused. Your definition is flawed to start. Selling the interest in the note has nothing to do with a short sale and, the bank (lender/servicer) doesn't sell any property they don't own. A short sale requires bank approval of the borrower, selling for less than payoff. A bank selling a note short of payoff happens every day and has no bearing or impact on the borrower's continued obligation other than where to mail their payment to the new servicer/lender/bank/owner.
Also, "who the bank is" (or the size) has nothing to do with whether or not the bank has any propensity to approve a short sale or not. Yes, if its a small bank and if its a portfolio loan, probably, maybe, the bank may be easier to work with but considering about 70% of the mortgages out there are Fannie/Freddie, those must be approved by Fannie/Freddie. If this particular loan isn't a GSE loan, again, yeah, maybe a small local or regional bank might be willing to cut through some red tape. Odds are against someone though that this would happen.
Finally, the "length of time the borrower has lived in the home" has nothing to do with redemption rights in KS. The statute states if the borrower has paid less than 1/3rd of the original mortgage amount, the redemption period is reduced to 3 months, otherwise, it is generaly a 12 month right of redemption.
So...no...that wouldn't be an option based on what the OP wrote. As others wrote, the property is worth more than what is owed and as a result, and as others have stated, it isn't a short sale (based on what the OP stated). What the property is worth is a factor the bank considers when reviewing a short sale.
Yes Ron we will agree to disagree - the simple def of a short sale is if the Bank is willing to let the seller sell the property for less than what is owed on the mortgage. So it was late and I couldnt sleep and didnt spell it out by the book definition. But could the seller sell for less than what is owed on the mortgage if the bank agreed - hell yes - so the equity in the house has nothing to do with whether or not a short sale could happen or not.
Secondly if the seller knows there is equity there why would they let it go that low, lastly would you as the buyer really be doing the seller any favors by trying to take advantage of them...ethics aside.
And I guess we can agree to disagree - who in the world wants to go down the rabbit hole of dealing with a national lender to get a short sale approved etc - Not me - I've got better things to do - margins in Wichita are so slim it's not worth it for a few bucks.
But Ron S you seem to be the expert here - I'll bow out.
Derek - seems like you have a deal if you can get the seller to give you wiggle room on the sales price - if you cant truly help them by closing fast refer them to a realtor that can help their house move so she can get some of her equity. All about listening to the seller and doing what's right by them for their situation and not just yourself and adding value.
Finally, the "length of time the borrower has lived in the home" has nothing to do with redemption rights in KS. The statute states if the borrower has paid less than 1/3rd of the original mortgage amount, the redemption period is reduced to 3 months, otherwise, it is generaly a 12 month right of redemption.
Again it was late - yes Im aware the amount of redemption time depends on how much of the original principal was paid off and there are other circumstances that can be argued, whether or not the house is occupied or not at the time of foreclosure, whether or not the mortgagee has lost their job between the foreclosure sale and expiration of the right of redemption etc. I didnt intend to put in the amount of time someone has lived in a place. I'd be glad to post a link to the statue if you'd like - I used to have it memorized verbatim but have not had any interest in redeeming a property for some time - but then again I'll save myself the time of posting up the link - since you know it all you likely can find it or have it memorized already.
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Finally, the "length of time the borrower has lived in the home" has nothing to do with redemption rights in KS. The statute states if the borrower has paid less than 1/3rd of the original mortgage amount, the redemption period is reduced to 3 months, otherwise, it is generaly a 12 month right of redemption.
Again it was late - yes Im aware the amount of redemption time depends on how much of the original principal was paid off and there are other circumstances that can be argued, whether or not the house is occupied or not at the time of foreclosure, whether or not the mortgagee has lost their job between the foreclosure sale and expiration of the right of redemption etc. I didnt intend to put in the amount of time someone has lived in a place. I'd be glad to post a link to the statue if you'd like - I used to have it memorized verbatim but have not had any interest in redeeming a property for some time - but then again I'll save myself the time of posting up the link - since you know it all you likely can find it or have it memorized already.
Thanks but, I'm aware of the statute. No need to post the link. And yes, on this subject, I would say my experience is more than that of the casual observer.
Usually the bank will order an appraisal and base their decisions off of that to short sale or to foreclosure.
Every lender is different...we've helped clients successfully short sale their properties and we even have a short sale we're working on at the moment. It's a process & usually the bank will get a realtor involved to get the money vs. Just letting only 1 investor have the opportunity.
Usually the bank will order an appraisal and base their decisions off of that to short sale or to foreclosure.
Every lender is different...we've helped clients successfully short sale their properties and we even have a short sale we're working on at the moment. It's a process & usually the bank will get a realtor involved to get the money vs. Just letting only 1 investor have the opportunity.
I think you mean the bank will require a realtor to be involved, not that they will get a lender involved? Banks require the property be listed on the MLS through an agent to expose the property to the broadest possible open market. I suppose a bank could bypass that requirement but in over 20 years, I've not seen any lender I've worked for allow a property to be sold via short sale without an agent and open MLS listing. And yes, I agree, we do order an appraisal and base our decision in part, as to approve, deny or counter a short sale offer, on the value of the property.
Yeah you're right. When I referred to lender I meant the bank...
But yeah I agree they will get a realtor involved and market the home to the open market and most likely get multiple offers before making any decision on any single offer after being marketed for a specific time period.
In our local market I don't think short sales or foreclosures are good deals for investors...the best deals (with meat on the bone) are usually off market...although a "good deal" is a relative term. As a matter of fact I don't even think real estate is as good as an investment as it used to be.
@Ron S. you give off Attorney vibes. Hypothesizing law is where your formal training resides?
Your drawing conclusions from information not given to you. I think your just still bitter that you were wrong and are trying to spin it that somehow, even with all of your fallacies, that there is any truth to what you wrote. You can come back for more as often as you wish. I don't mind the sarcasm or jabs.
@Shane H. Hi Shane I agree with you, in NY I see it happen all the time, these investors find people in foreclosure and get short sale approved - bank is willing to accept less than mortgage and does short sale. Then they flip the deal to an investor like me that does the rehab. I can see how much they got the shortsale for and I am always like WOW. in NY we have no redemption period.