Wholesaling: How to Avoid Short Sale

5 Replies

I'd like ask if anyone knows the best way to avoid a short sale in wholesaling. It would seem that most deals would gen up a short sale situation. Example: If my MAO is $54K (after ARV calc and rehab and assign fee) on a comp of $120K and seller owes $100K, that's a big delta and creates a short sale situation. What do you do/recommend? Is there any way to avoid this?

Target homeowners with equity would be the first suggestion.

The next is, if you get good at short sales, it can be a great deal source.  That way you have more tools in your toolbelt when you come across sellers in different scenarios...

Anson-sage advice. Sounds like absentee owners and established time in the property is a good inroad. After that, pair up with a REALTOR who specializes in short sales. On the surface, it seems short sales are almost unavoidable. Taking the 30% off the top even before you get into rehab costs tends to lend itself to a short sale situation. Thank you for the information and advice.

Don't expect the shorted lender to go along with the "take 30% off the top, then subtract rehab and assignment fee".  They're not in business to give you a 30% margin.

Find sellers that are motivate and able to sell. look for absentee owners.

Absolutely on all counts. I need to find those home owners who have enough equity in the property so my MAO actually covers what is owed. Sounds like it's a tough thing to do but I'll figure it out. Thanks to all of you!!

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