I’m really new to this…I’m actually collecting leads for a company that does loss mitigation and sales to investors when the house has at least 70% LTV. I’m working with a homeowner who is $16K in arrears and has not resolved the hardship. She really wants to walk away from the home before it’s foreclosed on. She just bought the house in 2006 so there’s no equity in it. For obvious reasons, the company I work with turned it down. But I’m wondering if there’s anyone out there (an investor) who might buy her house; she’s had it on the market but no one is interested. Is this a candidate for short sale?
This is definitely a candidate for a short sale! Why? Because she owes more than the property is worth!!! That’s what short sales are all about. When the owner owes more than the property is worth.
I forgot to mention that she is working; I read somewhere that if the homeowner is working, the bank won’t let them do this. Is that true? Also, I’d like to try to find an investor to buy the property, is this all the info I need: piti, liens, estimated cost of repairs, comps…am I missing anything to initially bring it to an investor?
You missed my point. They are not going to discount much below fair mkt value. It’s doesn’t matter what the borrowers situation is. What investor is going to pay fair mkt value?
Forget about short sales. They are a big waste of time. I’ve been there, done that. Just realize that the lenders are taking a huge amt of properties back which is reality.
I strongly disagree with Equity Hunter (unless he’s being sarcastic). 1st, the lender will tell you what’s needed for a short sale once you get them an Authorization to Release Form signed by the Seller. Whether the homeowner is working on not doesn’t matter. As part of the short sale package, the lender looks at income & expenses. Obviously, if the expenses is greater than the income, then they can’t afford the house.
As with any type of investing, you need to have an exit strategy. Most exit strategies require a buyer’s list. For example if you want to wholesale to investors, then you need to know what they’re looking for. In some markets, investors don’t care whether or not houses are 80% or even 90% of FMV. Just depends where you are.
There’s a lot involved with short sales. You should take a look at the books & courses offered on www.reiclub.com to see what you might need to get educated.
Thank you, rgchamp! Because I’m not at all familiar with investing, I would not try to attempt to contact the bank myself. I’m hoping to gather enough information for a “real” investor to be interested in helping this woman. I’ve learned a lot from reading these posts and I most definately want to get educated enough to be able to do this in the near future. However, this homeowner will soon be facing foreclosure and I don’t want my inexperience to impede her being able to avoid it. I know a lot of people (infomercials!) talk about how easy investing is, but these are real people’s lives and fortunes we’re dealing with and if I do this at all, I’d like to do it well.
So, I want to help gather info, present it to a reputable investor, and learn from how they handle it. It’s a win for me in learning from a pro how this works; it’s a win for the homeowner in avoiding foreclosure; and it’s a win for the investor in getting a good property. I will come back here and post when I have all the details for the home; perhaps there will be an investor here who will be able to help.
cleger: Convince the investor to give you a finder’s fee if he closes the deal. That way perhaps you can use the funds towards your REI education.
What city/state are you located? Who is the bank? How long has she been in default? etc.,