A possible deal came my way. I’m a noob and need a little guidance.
An investor bought a burned out house in my neighborhood, rehabbed it fully and did a nice job at it. (I went to their open house) Turns out he bought it for 210, put 70k into it and was trying to sell it for 280k. OUCH! The MOST he could have squeezed out in this neighborhood was 260k. I was pulling for him to sell it high so my house value would go up. Dangit!
Now he is in forclosure on this and 2 other houses. I do not know where they are in the forclosure process.
All this house needs is the lawn greened up. I could sell it for 240 in a few months or firesale for 225. However, I DO live here and this will become a comp for MY house so I want to try to keep it at 240 .
I think this would be a good canidate for a short sale with the bank if I could get maybe 180k. I’d use either hard money or my money friend who has expressed interest in going in on a deal with me.
I saw this orignally because I live in the neighborhood, but my realtor mother in law has spoken to the investors herself (when things were good) and is the one who just told me it is now in forclosure. I guess I would need to deal with the bank and then use my MIL as the realtor to sell it.
One more thing though. I do know they are investors, so why wouldn’t they just have someone they know try the short sale for them (rather than letting me in on it)
Am I beating a dead horse?
What approach should I take?
This would be my first deal.
In order to do a short sale you need the homeowner to agree to work with you. You can’t talk to the bank without their permission.
If the bank agrees to let you propose a short sale they will send a BPO agent to get value. Typically you shouldn’t expect them to discount the loan more than 82% of the fair market value of the property.
I don’t believe that the foreclosing lender will have the same “warm and fuzzys” for an investor that they would for a owner occupant. I personally have never quite been able to fashion a short sale where an investor is the owner to come together.
However, the lender is running a business and if you could create an extremly compelling argument that would force the lender into considering your offer…?
You are however in a “catch-22” with regard to a short purchase and your personal property values.
can you have the purchase sealed? Michigan allows cash deals to be sealed.
Yeah, I was just going to mention that if you can’t have the deal sealed, the short at 180K will be a comp for your house too.
It shouldn’t bother you because you will be profitting from that low comp but it is a comp.
Please explain the term “sealed” as I am not aware of that phrase in Florida regarding the sale of real property.
Only a few states allow it and I never do it. It simply means not having the sales price publicly disclosed.
And this is legal? In Florida, when a deed is recorded it carrys with it a documentary stamp tax that includes the purchase price as a part of the calculations. Therefore any real property purchase in Florida reluctantly coughs up the true purchase price.