All Forum Posts by: Ralphy Rosado

@Ralphy Rosado if you can sell them as a   bundle then it can be structured as one exchange and save you a bunch in exchange fees and risk from the calendar time lines.   The type of real estate does not matter. Any kind of investment real estate can be exchanged for any other kind of investment real estate.  And the size and number of properties and how you allocate the proceeds does not matter either.  if you want to avoid all tax you must purchase at least as much as you sell and use all of the proceeds in the replacement purchases.

You plan looks very solid.

Hi @Ralphy Rosado,

Short Sales are tough in general. The bank dictates everything, they are in no means a quick process and even licensed agents avoid them because of the time involved (Not to mention the bank can stop it halfway through and decide they changed their mind and want another opinion). There are alot of people who would like to sell their house on a short sale but the setup for it is difficult. Just to give you a few steps to help make sense out of it:

1) Homeowner decides they cannot keep up with the payments and wants to sell but they owe more than it is worth.

2) Homeowner calls bank and asks if they can sell for less than worth

3) Bank says "no" you made the last payment you can do it.

4) Homeowner gets behind on payments enough to make bank decide to tell them to get a BPO.

5) Agent looks at house and gives a price opinion and contacts bank

6) Property gets marketed on MLS and signage/newspaper ads etc

7) Offer comes in

8) Owner accepts whatever the offer is because if it closes they don't get foreclosed on

9) Bank gets signed offer and sends it to their groups to look at and decide if they like the deal (can take months)

10) Bank comes back and says "not enough"

11) Repeat steps 7-10 until bank says "yes"

12) Begin closing process

This of course ignores the hardship documentation that has to be submitted etc. There is really nowhere to wholesale one because the Bank will require a BPO from someone licensed and then they are not really holding a firesale, they want as much as possible, then they usually try and get the agents to take a lower commission. 

Good luck in whatever you decide!

I wouldn't worry about going after short sales if you plan to keep them as rentals.

The problem really comes in when your plan is to flip. Law enforcement agencies generally believe that if you resold a property purchased from a bank for more than you paid for it, you must have defrauded the bank. That may or may not be true, but that is their default position. In some jurisdictions they even monitor for those transactions.

Hate to say it but the investing community brought this on themselves. Quite a few investors used their RE license to list short sales below market on the MLS, then ignored legit offers to make it look like they weren't selling, and then had their own company make a low ball offer in order to truly defraud the bank. Unfortunately a few bad actors can lead to every deal being suspicious which is now where we sit. :-(