Real Estate Investor · Charlotte, NC · Member since 2011 · 14 posts · 0 votes
Currently, I am working with an owner that has a 4 unit property scheduled to be demolished. I am working with the county inspector as well. The owner is letting the property go into foreclosure and has not paid for a whole year, owing just over $6k. She owes $101k. The tax value is $151k. It is zoned R-4 (SF - 4 units per acre)
I understand that I must work with the lender in order to negotiate a short sale.
My question is: What are the step, from beginning to end, that I need to take to pursue this? I do not have any contract with the owner. What approval will the lender need to speak and negotiate with me? Also, what can I expect as a rational short sale price?
Specialist · Cleveland, OH · Member since 2011 · 1k+ posts · 852 votes
14y
step 1. get a contract at a low price.
step 2. justify it with a killer cost to cure quote.
step 3 give it to your attorney to negotiate
step 4. Visit your local church and pray.
Step 5. keep looking for deals, this will take a while
SFR Investor · Dallas, TX · Member since 2009 · 71 posts · 12 votes
14y
Christopher Davis, look up Monica Breckenridge and read her blogs and also her website has plethora of information. Also look under the Resources tab on the above menu and select Articles for any. Good luck.
Rental Property Investor · Colorado Springs, CO · Member since 2010 · 476 posts · 305 votes
14y
Christopher Davis Hi Christopher, I recommend you contact a realtor to be a transaction broker for you and the seller. Preferably a realtor who has short sale experience and has a short sale team or knows how to process the short sale themselves. The realtor will get paid by the bank. This makes the process the easiest for investors so they are hands off and don't have to worry about any of the paperwork.
Real Estate Investor · Charlotte, NC · Member since 2011 · 14 posts · 0 votes
14y
Hello Monica, thank you for your response. I was just looking you up, suggested by Bala. Your solution makes complete sense. It would work the same way if it is a wholesale deal correct? Or does this get too sticky? I also understand a need for transitional funding if it were a wholesale deal. All in all, I am not focused on wholesaling as my stream of income. Just this transaction. I am building a private money lender list besides this. Thank you for your time. Appreciate your experience!
Rental Property Investor · Colorado Springs, CO · Member since 2010 · 476 posts · 305 votes
14y
Hi Christopher, its going to be extremely hard to wholesale a short sale. Banks often have you sign restrictions on reselling the property for a profit and they often want you to hold for 30-90 days. If you still want to wholesale you will need to get transactional funding. My preferred method is to just find your wholesale buyer once the bank counters you. I would reject the banks counter and have your wholesale buyer submit his offer instead. Have him pay you a fee outside of closing as a finders fee. This makes it cleaner and you make more money because you dont have to pay for 2 closings or transactional funding.
Real Estate Investor · Charlotte, NC · Member since 2011 · 14 posts · 0 votes
14y
Great advice. Thank you for making it very clear and easy to understand. Bala referred to your blogs. How do I get to them? Thanks again! Gotta love Colorado Springs
Specialist · Cleveland, OH · Member since 2011 · 1k+ posts · 852 votes
14y
step 1. get a contract at a low price.
step 2. justify it with a killer cost to cure quote.
step 3 give it to your attorney to negotiate
step 4. Visit your local church and pray.
Step 5. keep looking for deals, this will take a while
Real Estate Investor · Charlotte, NC · Member since 2011 · 14 posts · 0 votes
14y
@Rob In regard to step 2, what does this mean exactly? In regard to step four, having a lack of security has me doing this everywhere. Rob, I am finding most of my leads on the county website (Houses that are scheduled to demo). Other than that, I have had no fortune with Craigslist, Bird dogs get very expensive, and other avenues have proven unsuccessful. Is there another avenue you would recommend? Thanks for your time and willingness!
Sacramento, CA · Member since 2012 · 11 posts · 0 votes
14y
How true is it that banks will not negotiate a short sale for a property that hasn't been listed on the MLS? I've been told this by several real estate agents but I can understand why they would tell me that - is it possible to hire a HAFA/short sale specialist to negotiate an off-market shortsale, and which banks will allow that?
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
14y
Originally posted by Josh K:
How true is it that banks will not negotiate a short sale for a property that hasn't been listed on the MLS? I've been told this by several real estate agents but I can understand why they would tell me that - is it possible to hire a HAFA/short sale specialist to negotiate an off-market shortsale, and which banks will allow that?
I haven't heard of any major banks that don't require a property to be listed publicly (on the MLS) these days. There may be some local or regional banks that will negotiate directly without this requirement, but none of the big boys are allowing short sales to forgo listing in my experience.
Real Estate Investor · OR · Member since 2012 · 390 posts · 133 votes
14y
Originally posted by Monica Breckenridge:
Hi Christopher, its going to be extremely hard to wholesale a short sale. Banks often have you sign restrictions on reselling the property for a profit and they often want you to hold for 30-90 days. If you still want to wholesale you will need to get transactional funding. My preferred method is to just find your wholesale buyer once the bank counters you. I would reject the banks counter and have your wholesale buyer submit his offer instead. Have him pay you a fee outside of closing as a finders fee. This makes it cleaner and you make more money because you dont have to pay for 2 closings or transactional funding.
WOW Monica, that was worth the price of admission today! No, wait it's free to learn here. That was priceless info! Thank you so much. I've been wondering about this for a couple days since I found some ss that I'd like to work with.
If a ss has been on the mls for 150 days (in that range or more) does that indicate they aren't accepting investor offers---they're going for top $$. Just wondering what patterns you've seen since you do so many.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
14y
Originally posted by Melodee Lucido:
If a ss has been on the mls for 150 days (in that range or more) does that indicate they aren't accepting investor offers---they're going for top $$.
It could mean many things:
- It's overpriced and can't get an offer;
- It has an offer and is under contract with the lender evaluating it, and the listing agent wants backup offers;
- It's gone into foreclosure (or expired) and the listing agent has forgotten to update the listing;
- The listing agent got the listing from an investor, immediately took the investor's offer and is now letting the property sit on the MLS without allowing any other showings. At some point, the listing agent will present the investor's offer to the bank and tell the bank, "It's been on the market for a LONG time and this is the only offer we got...you should take it.";
- The seller isn't serious about doing a short sale and only wants to delay the foreclosure so they have more time in the house, so the agent has listed the property, but isn't actually allowing anyone to see it.
The last two are becoming increasingly more common in my experience...