Is it possible to wholesale a property via a shortsale?
Not by assigning the contract. And double closing is frowned upon because you knew of someone willing to pay more before you bought it.
What you can do is form an LLC, get the short sale under contract under that LLC and if it looks like it is going to close, sell the LLC prior to close.
If it doesn't close you can re-use the LLC.
Petra - I wholesale short sales from time to time. I simply do a double escrow with two title companies. The challenge, however, isn't with title or double escrows. The challenge we find are the deed restrictions and the contractual limitations that banks attach to the short sale approval letter. It is very important that you read and understand the short sale approval letter and that there would be no deed restrictions limiting immediate resale. The language and limitations very from "no resale within 60 days" to "no resale in excess of 120% of purchase price within 120 days" or similar restrictions.
How do you get around the bank seeing the LLC ownership docs? It might be different since I'm a real estate agent but I am trying to figure it out on a deal right now.
@Travis Baucom Sort of like a double close. I haven't actually done this, mind you. I've just spoken with my attorney about it. You sell the LLC just prior to closing on the property.
Just closed one, it was kinda messy. You can sell LLC's but some states have high taxes on those like california.
I just did an agreement outside of escrow with the buyer and we ran the SS with their name from the get go. Yes, some say you could put yourself at risk of not getting paid but work with people you trust. Also, top priority for me is keeping my word and closing on the SS. You can't mess around with these deals, someones livelihood can be on the line with them.
They are deals for the more advanced wholesaler or someone with very good relationships with their buyers.
Like @Larry T. stated, Selling llc is the best way to go on SS.
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