All Forum Posts by: Ted Akers

I think everyone here is acknowledging that you do not want to flip without disclosing that you are an investor intending to resell for a profit, and that flipping during a required bank holding period is foolish if it is part of the short sale approval or affidavit. Clients I fund for are disclosing, and the bank can decide whether to accept the contract or not. The banks idea that it is illegal or fraudulent if it is disclosed is an interesting concept.

Chris Clothier makes a great point in what would seem all too logical for most business people. It is understandable why banks prefer to not have investors in the middle making a profit. BUT, with substantial inventory; and I say much more to come their direction, you would think they would welcome any and all reasonable buyers.

Most retail buyers looking for an owner occupied home are not willing to wait through the totally undefined period of time a short sale will take. Investors willing to wait through what can be a painful process and to clear out other liens are a reasonable alternative to a banks problem deals. Penalizing investors by adding costs (with required holding periods) does not make business sense and reduces that pool of potential buyers.

National attornies familiar with the issue will say the bank has no legal standing to impose what amounts to a deed restriction; and, as Andy pointed out, in short sales an actual deed restriction (Bills "Greed Restriction") is typically not recorded. However, the bank does have veto power over approving the short sale and requires all parties to sign to such a restriction at closing. Although there has been much press that flipping short sales is fraudulent or illegal most attornies say otherwise, as long as it is disclosed, and national title companies would not be closing them if they viewed them as illegal.

Once agreed to as part of the banks requirements it is not worth trying to short circuit it, as Chris pointed out. Your solution in that case is to use extended transactional funding if you have a buyer under contract, or hard money/private lenders. It adds to total cost, which does serve the banks desire to reduce flipping, but is recommended once any parties agree to the holding period restriction.

The mortgages would be paid off with transactional funding just like any other purchase, as pointed out by J Scott. Some may still, but national title companies typically will no longer allow the use of the end buyers funds to be used for your purchase.

Great summit for networking and for actual content without high pressure sales pitches. That is Josh's and BP's hallmark and what so differentiates Bigger Pockets as the premiere REI site out there. I have attended many similair conferences - hats off to Josh and all of the presenters for delivering useful content. I have not been as active on BP in recent months, but the summit was a good reminder of the value of the expertise of its members. Great job Josh.

Bryan, funny! I'll remember to send you a personal invitation. Bank of America is the "evil empire" and their arrogance shows in all areas - short sales, mortgage, and credit cards. Although we have to give them credit for an effective lobby.

Motiv8ted - Also you better have your end buyer in placed and ready to go or else you better be ready to fork out the money and keep it.

Sounds like good advice. Desperate, if you are offered mentorship here you may want to verify if the mentor has closed these type of transactions.

Good detailed response by Shari. You may want to also include a Mortgage or Deed of Trust (depending on which state you are closing in) as a backup for the B-C transaction not closing. A Deed in Lieu of Foreclosure is a good idea, but most courts will hold that one required at the time of closing will not be enforceable.

I second wills comment on extended term deals being much riskier. They tend to be a hybrid type deal which can be similiar to a hard money transaction. You may want to get a few same-day transactions under your belt before considering extended term transactions.

Good thread here. A couple of simple answers are to ask her for the citation proving them to be illegal or to point out that they are closed every day of the year by national title companies, AS LONG AS there is complete disclosure to both sides of the transaction. Reality is she will never get it so move on to someone without blinders on.

Has anyone completed a deal with Nick Johnson in the past 6-12 months? What type of deal, and how was you experience?