Submitting offers on shortsales...is it REALLY this easy??

8 Replies

I was talking to a friend last and he was telling me how he submits a ton of offers on short sales, waits to meet with the BPO to explain his offer and then get it accepted by the bank. Is this really the case?

It depends. Is he finding these short sale sellers himself or is he submitting offers on properties that are already listed by an agent on the MLS?

If he's finding sellers himself, there's a good bit of legwork required for that. And if he's submitting offers on listed short sales, most likely the listing agent is already going to have a negotiator who will coordinate the BPO and the negotiation -- getting involved in the BPO and negotiation as the buyer may be difficult, especially if the listing agent already has a short sale team put together.

That said, I offer on several short sales per week -- it will take a few weeks/months to get a response, but the process is easy.

I just wouldn't recommend offering on short sales unless you are quite certain you can close the deal if they agree to your price -- remember, these are people whose financial future hangs in the balance, and if you don't close on the deal, you could really be screwing them over.

J - these are deals that are on MLS listed with an agent. He's doing the same thing as you except he's wholesaling them, he has buyers lined up because he knows it's a good deal.

The big problem he'll run into are the banks where there is a resale restriction -- in those cases, he won't be able to wholesale unless he takes title in a trust or business entity and assigns/sells the trust/entity.

Yeah, he's signing the contract with a dummy LLC and then assigning the rights.

Originally posted by Mike Nelson:
Yeah, he's signing the contract with a dummy LLC and then assigning the rights.

Here's the problem with that strategy if he's submitting "a ton of offers":

Every short sale I've offered on, the bank has required a copy of the Articles of Organization and Operating Agreement during the negotiation process, so to do this correctly, he'd need to be setting up "a ton of" LLCs, which can get expensive very, very fast.

And if he's offering on every property in the name of one LLC, he runs the risk of the bank not allowing him to change purchaser information, in which case he could end up with lots of properties all in the same LLC, which would make it impossible to sell individual properties to different buyers by selling the entity.

Is he setting up different LLCs for each property? If not, how is he dealing with multiple properties purchased with the same LLC?

I recently had this discussion with someone who claims he submits his offers with a dumby llc. He writes them up as Brian Bremer to be formed as 123 summit rd llc or whatever address the property is. Again I understand most banks want AOI and company in good standing. This sounds like something someone heard and has never really tried. This would solve the problem of having numberous llc's being formed just to submit an offer that could take months and simply be rejected.

Originally posted by @Brian Bremer :
I recently had this discussion with someone who claims he submits his offers with a dumby llc. He writes them up as Brian Bremer to be formed as 123 summit rd llc or whatever address the property is. Again I understand most banks want AOI and company in good standing. This sounds like something someone heard and has never really tried. This would solve the problem of having numberous llc's being formed just to submit an offer that could take months and simply be rejected.

In order to provide a proof of funds, he'd need to set up a bank account in that LLC's name. And to set up the bank account, he'd have to register the LLC with the Secretary of State in whatever state it was in.

After all that, he still couldn't have a wholesale deal in place at closing (even to just sell the LLC) without violating the affidavit he'd have to sign stating he didn't know of any agreements relating to the property that haven't been disclosed to the lender.

Sorry, this just doesn't work (legally)...

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