Aloha, I was in the process of doing my first short sale here in Hawaii. Bank approved it for $399K. Owner paid $549K in 2004. I offered $345K. The house and detached cottage bring in $2800 rent per month. (Does this sound like a decent deal?)
Just got word back that the seller’s attorney recommended he NOT go through with the short sale but let it go to foreclosure instead. Can someone explain to me why that is a better option for a seller? I can’t understand the logic of this.
Is there anything I can do get the deal done before it goes to the bank?
Thank you to this forum for helping out the newbies with our questions.
Mahalo, Lisa
Even at 5% for 30 yrs, payments on 345k are $1852.03.
How much are taxes and insurance? Everything is expensive in Hawaii. Seems like the rent is way too low on this if you’re wanting monthly cash flow.
Justin,
Thanks for responding. P&I would be $1735 if I put down 100K of my own money. Taxes and Ins. are $335.
In Hawaii it’s hard to get much positive cash flow. I’m hoping that I can just get expenses paid for with rental income and sell when the market values go back up.
Appreciate your input.
Lisa Cary
Maui
That deal is a LOSER…A big, fat, financial LOSER!!!
Instead of WASTING your time with these short sales…Run some small classified ads in the penny saver or shoppers paper in your area. You DO NOT want to be in large Metro papers…
Your ad should be short and sweet.
I BUY OLD, OUTDATED HOUSES!!! The worse the condition the BETTER!!
555-555-5555
You want properties owners are EMBARRASSED to list with an agent. These properties are OUT THERE, NO ONE knows they are for sale, the owners are uneducated and they WANT to sell…Buy them then immediately list them on the MLS and let the FEEDING FRENZY BEGIN!!!
When I started out 20+ years ago my mentor asked me a simple but eye opening question…
HOW MANY PEOPLE KNOW YOU WANT TO BUY HOUSES THAT NEED WORK???
My answer…
NONE…
His response???
Well how the HELL do expect these people to get in touch with you???
SO…Other than REALTORS trying to SELL you properties…How many people know YOU want to buy houses???
And don’t think for ONE SECOND you can’t make $100,000 pr MORE on a DUMP that needs work…I sell these houses by the DOZEN…RARELY repair them and just SELL them to people who DON’T UNDERSTAND you have to GET 'EM before anyone else knows they’re for sale!!!
I spoke with the owner. Turns out he does not want to submit all of his personal financial information to the bank in order to go through with a short sale. He suggested we work the deal between us. BUT the bank wants $399K and I can only pay $350K. How can I negotiate to get the price I want?
Thanks for your help.
In order to work the deal between you he would have to put up the difference, which it doesn’t sound like he is able to do, or willing. It doesn’t matter what the bank wants if the owner isn’t willing to work with them. I’d move on.
Hello -
I have lived and worked as a real estate agent in Hawaii (Honolulu) about 15 years ago, so I know that as an investor you have to consider things a little different than on the mainland. Sometimes you might not cash flow as much, but if the property is fee simple and with appreciation potential because of the location, it might be worth it.
If the owner does not want to do a short sale, call the bank. Ask them if they would consider selling the mortgage note to you instead: it would be a much faster process, the bank would not have to foreclose and the final result would be the same. If you are willing to pay $350k for it, start with an offer at $300k and work up from there. You might have to use some negotiating skills with the bank and make them see that the owner is not going to pay up, it will go to foreclosure and the legal costs in Hawaii on foreclosure are not light. You are a willing and able buyer and can close in a month: they should consider it :biggrin
Laura,
Thanks for replying. Yes, Hawaii is a very different market. Not so easy to get cash flow. But if I can get
this property for $350 it would have a slight cash flow and due to the neighborhood it’s in I think it would be
a good deal for a buy and hold. I have no experience in negotiating with banks. Would you recommend that I just jump in and try or are there professional negotiators that have the skills to pull something like this off? If so, where would I look? I’ve never done a short sale before so this is all new to me.
Thanks,
Lisa