My First Deal in the works....NOW WHAT?

I met with my first prospect today. She two months behind, and she wants out badly. She agreed to a short sale. I going over tomorrow to sign the contract. I plan on putting the property in a land trust so I can flip it to another investor and do a double closing.
The property value is $410k
The loan balance is $325k first and $30k second.
She Owes $5200+ late fees
Recent sales in the area are between $300-360k.

What kind of contract do you use, standard or Investor base?

What should I add to the contract to secure my exit?
example: contingent upon approval from the lender_contingent upon buyer’s partner’s approval.

Any ideas will help…

Thanks to all

I would focus on getting the lender’s approval of short sale. That alone will take all your energy and patience (take some vitamins this month). Use a standard purchase agreement. No sense confusing the lender with new fangled contracts. This will take time, but be ready for when you get approval. The lender may require a 10 day closing once you have approval.

I suggest first find out why she is behind? Is her problem temporary or permanent? I would let it go if she cant prove to you she has a real hardship.

In my opinion, you should start with a property that has only one lien; shortsales are very chanelging and having a second will make it more difficult for you.

I would use the option to purchase contract which gives you equitable rights and allows for you to list on the MLS. Find your end buyer and double close your deal.

With standard P&S you may end up with seasonig issues and/or lender won’t allow assignment.

Hope this helps!

WHAT?? Go for the seconds!!!

Seconds will take 1-5k and usually never more than 10%!! Very easy

I thought about doing a purchase option, but she has an ARM at 8.75% she is paying $2600 a month. That’s a $1000 above the market rent in that area. Also the 2nd is with her brother so it should be easy cause he wants to help her out of the situation and he’s wiling to discount.

She is a single woman in her 60’s and just cant afford it any more plus she’ all healthy right now.

Allin08, What would be your scenario on a purchase option in this situation?

Do you offer promissory note on a SS that has no equity?

The option contract is a method of purchasing for a short sale. It is not a lease option. The market rent has nothing to do with it. By using an option and recording the memorandum of option you have an equitable interest in the property and it helps to alleviate some of the seasoning issues for you end buyer if the are not paying cash but need to finance.

if anyone finding banks giving you a hard time negotiating short sales when there is an option contract?

also whats the difference between and option contract and a purchase agreement that has option terms. both would seem to provide an equitable interest in the property.