Working on my business plan which is creating many questions… guess that means its doing its job already!
Theoretical situation…
ARV = 100,000
Seller Owes = 80,000
Short sales = 70,000 - Bank and seller agree
Is there a problem with splitting the shorted equity with the seller? Short it for 70k, but then buy it for 75k (5k to the seller at closing) I would think the bank would be against this. How can you put $$$ in your sellers pocket at closing of a short sales?
You don’t put money in the seller’s pocket on a short sale. Why would the bank want to lose money and then let you give money to the seller? The benefit to the seller is that they are no longer responsible for a property/mortgage that they were unable to handle.
Thats what I thought
I would tell the seller they will get paid when you get paid.
That how it usally goes when someone sells their house, right.
They get paid when the house sells, why should it be any different!
When you sell the house, type up a bill of sale, and buy something form them for 5,000
IF YOU MUST PUT money in the sellers pocket to make the deal go down. I offer 20% of what the bank will lose So for example. On a 10k loss that is 2k to the seller. SO… If the bank takes no loss then no pay. I always sell the idea of it being a distressed property which has a lesser value that market. Write up a contract to purchase the appliances, ceiling fans, for some cash. This will keep it off of the HUD-1 statement.
Happy Investing!