Rental Property Investor · Washington, MO · Member since 2021 · 16 posts · 4 votes
Hi BP!
I have came across a potential short sale opportunity on a single family home. The seller has been unable to sell the home for the asking price of $200k which is what they say is owed and they are likely going to consider a short sale if it will be allowed by the lender. I see this as a potential opportunity to get into a distressed home under market value.
-For the first investment is this a bad strategy?
-What the pros/cons that others have experienced?
-Questions to ask to home owner?
I appreciate any help in advance. I have read about buying Short Sales in Bigger Pockets text and am curious to learn more about this opportunity.
Investor · Los Angeles, CA · Member since 2012 · 1k+ posts · 500 votes
5y
The person who is processing the deal wants to try to purchase it? Not much you can do without getting your offer excepted. I suggest being super flexible with seller to accommodate their timing, moving, etc if they live in the property. I don't suggest closing till it's vacant though. That typically is a value add.
Rental Property Investor · Washington, MO · Member since 2021 · 16 posts · 4 votes
5y
@Brett Goldsmith it looks like they are very delinquent and have had some financial troubles in the past as well. The home was purchased in 2005 for 180k and refinanced in 2007 for right at 200k. According to the seller they owe $200,000 now.
Looks like the person doing the short sale paperwork has first dibs on this deal. Is there anything I can do to add value to the seller and get a potential in on this deal?
Investor · Los Angeles, CA · Member since 2012 · 1k+ posts · 500 votes
5y
The person who is processing the deal wants to try to purchase it? Not much you can do without getting your offer excepted. I suggest being super flexible with seller to accommodate their timing, moving, etc if they live in the property. I don't suggest closing till it's vacant though. That typically is a value add.
Rental Property Investor · Washington, MO · Member since 2021 · 16 posts · 4 votes
5y
I spoke with the home owner today and they are in the process of initiating the short sale with their lender. Not sure if they will be willing to proceed.
-$20,000 behind on payment, has not made a full payment in about a year and has had issues with the lender for the past 5 years. (Not willing to work on payment issues etc)
-tried to do Chapter 13 but was refused
-owe about $170k including loan and fees accrued from attorney, back payment, etc.
-Bank is saying home is worth more than owed (around $220,000)
-has tried to sell but has only received offers in the $110,000 range.
I am setting up a time to view the home and get an estimate of what needs to be done to rehab the home. I am trying to think of ways to help the owner through the process of getting this short sale initiated and my thought is an offer with an itemized SOW with quotes from my contractor might help.
Does anyone have insight to what a buyer can do from here to help this process along? Is it wise to try and connect with the mortgage lender and speak with them?
Real Estate Broker · Jacksonville FL & Middletown, CT · Member since 2008 · 1k+ posts · 633 votes
5y
The lender won't speak to you unless the homeowner has authorized you on the account.
You don't know if they will proceed? Do you mean the lender or the homeowner? If the homeowner wont proceed you have nowhere to go with this.
In order to proceed at all, you need to have this seller under contract to sell the home to you, and the seller needs to be ready to cooperate with his short sale.