How should I approach this one?

Question

Long story short: Guy called me w/a 4-plex that's in pre-foreclosure..it needs slight repair work but he doesn't know the ARV or the amount of repairs. He's open to offers and there are 2 liens on it, one for $360k and one for $60k. I'm looking to wholesale this one b/c I don't the time or patience or assets to do a short sale. Any ideas? and if I do wholesale it, what should my offer be? This is new territory for me.

Robin Vidovich · Answer

Just did one in January with Country Wide.

Robin Vidovich · Answer

I have wholesaled Short Sale properties. Yep, they are a pain in the butt, however they can be profitable.

I get the property under contract with the bank (negotiated price) and have an assignment clause in the agreement of sale.

After that point and time I do the same as I would with a regular wholesale deal. End buyer goes to close.

These deals take more of my time but as I stated, you can make money.

Robin

Jason Cummins · Answer

Like I had said before, I have yet to work any short sales.  But with that said, I have talked to people here in Houston who constantly work short sales with the exit plan as wholesaling them.

Whether they do an assignment of contract or a double closing I am not sure.  I do however believe it is probably a double closing.

I also get emails every week from different wholesalers lists here in Houston to where the wholesaler worked the short sale and wants to "wholesale" it to an end investor.

From what I know about it, the wholesaler works the short sale him or herself and get's an offer and the short sale approved.  The wholesaler then markets the house and tries to sells it to the end investor.

However I do hear that there is a lot of risk involved because if you cannot find a buyer within your inspection period, and cannot close, you really end up hurting the seller and yourself if any money was involved.

Jason Cummins · Answer

I dont understand why this is in question.  I personally do not know how to short sale.  I have yet to do them.  But I do know that a short sale can be wholesaled, as I have talked to people who have wholesaled them.

Ruben Aguirre · Answer

how do  you wholesale a deal that is going to be a short sale which the bank may not accept?  I assume you assign the contract with the seller who has agreed to sell the property below the balance on his loan, then your assignee does the short sale negotiations, closes on the property, and you get paid from the proceeds of the closing.  is this correct?

Jason Cummins · Answer

Very good!

I personally do not know how to do shortsales, but I am wanting to learn.

But I do know that you CAN wholesale them because I have met plenty of people who do.

Jorge Caicedo · Answer

Hi Jason..funny you should mention that b/c i got a call from an investor who does short sales and when he asked me what i wanted out of it, i told him i wanted to get it under contract and assign it. He asked me to go take pics since i was closer to the prop than him and I just sent them to his e-mail. Now i'm just waiting to see if he wants to pursue it.

Jason Cummins · Answer

Patience is a virtue my friend...

There is A LOT more we would need to know.  The seller may not know the ARV, but this is where you come in.  What is the ARV?  You also need to know about what the repair costs will be.  You need these numbers in order to wholesale ANY deal.

Once you have those two numbers and have them pretty good, then we can help you with what to offer.  Until then we have no idea.

By the way, you can wholesale shortsale deals.

Jorge Caicedo · Answer

gee..thanks for the advice