OK! I AM A NEW INVESTOR AS WELL AS NEW TO DOING SHORT SALES. I WAS BEGINNING TO THINK THAT MAYBE SHORT SALES WASN’T THE RIGHT PLACE TO START FOR A NEWBIE. ANYWAYS, I HAVE BEEN WORKING ON MY FIRST SHORT SALE FOR ALMOST 3 MONTHS NOW. I HAVE BEEN GETTING THE RUN AROUND FROM THE BANK. BUT FINALLY TODAY I WAS ABLE TO TALK TO A LOSS MITIGATION REP WHO QUICKLY DISMISSED MY FIRST OFFER, AND TOLD ME TO HE WOULD COUNTER FOR 200K WHICH I EXPLAINED TO HIM WAS WAY TO MUCH, SO HE TOLD ME TO SEND HIM A SECOND OFFER TODAY. OK MY QUESTION IS WHAT SHOULD MY SECOND OFFER BE? I DON’T WANT TO GO TO LOW OR TO HIGH.
HERE ARE THE NUMBERS:
THE ORIGINALLY MORTGAGE WAS 124K BUT WITH LATE FEES THE HOMEOWNERS NOW OWE 132K. THE HOUSE NEEDS AROUND 35K WORTH OF REPAIRS( PLUS IT HAS MOLD). MY FIRST OFFER WAS 46K I WAS THINKING ABOUT OFFERING 60-65K FOR THE SECOND OFFER. THE COMPS ARE BETWEEN 90-96K FOR HOMES IN THE AREA.
NEED ADVICE!!! TRYING TO SUBMITT SECOND OFFER TODAY
Yes, short sales are definitely not the best place to start if you haven’t any training or mentoring. The key to getting a deal on a short sale is the BPO. Banks go off the BPO and in general won’t let it go for less than the 82% of BPO. Any idea what the BPO came in at?
The other part of this is you buy based on your numbers, not what the bank wants. If you can’t get it at the price you need, you move on. The price you buy it at depends on your exit strategy.
The fact that he countered at 200K when only 132K is owed tells me he thinks you don’t know what you are doing.
THANK YOU FOR RESPONDING TO MY POST. HE SAID THE APPRAISAL FOR THE HOUSE WAS 162K. BUT I SUBMITTED A SECOND OFFER FOR 68K. SO I WILL SEE HOW IT TURNS OUT.
Keysha,
You are right in the fact that short sales and foreclosures are a tough place to start for a newbie. There is a lot to these transactions and not having any experience can cross you up.
For most of the Newbies I work with I suggest starting in Wholesaling. REI Club has a wonderful forum on the subject and if you contact me outside of the forum I can give you some other suggestions as well.
I wish you a lot of luck in your dealing and if I can be of any help drop an email.
if I told you that a bee sting hurts, you wouldn’t go looking for the biggest hive you could find and stick your head in it cause you are way too smart for that…
well cutting your investing teeth on a short sale is equivalent to the above unless you have someone negitiating the short sale for you.
but re: your deal and offer, personally I think your first offer is the max because you got at least $35k in repairs (repairs are always more than we think, always) and then you add the M word and things get interestingly weird real quick as far as repairs…
then if all that works great you have to configure the deal most likely for a LEGAL dbl closing which again for a newbie is akin to my bee-hive analogyy! mentor or not these deals require plenty of work and time in comparison to some of the other lower hanging fruit in the investing world…
my goal is to give it to you straight not to be negative… lastly regarding putting your head in a beehive, if you know where to get a bee keepers hat than you can be in the biggest hive and not get bit once… so the moral of my seemingly endless dissertation is with the proper tools and knowledge even difficult tasks are simple…
ps. I wish you the best and wholesaling is easier and requiires fewer tools