Can I assign a short sale deal to a rehab investor. Pls explain. Since dealing with bank
Most banks will not allow you to assign the contract. A lot even have special addendums where they do not allow transfer or assignment of the sales contract. You may be able to do a double close. Most banks also want proof of funds or a pre qualification letter with the contract
But the bank doesnt own the property yet? Its in pre-foreclosure. So if I talk with the homeowner for example
3 months past due 2400
I couldnt get a short sale and then assign to another investor since the home still belongs o the seller? I am not talking about doing a short sale on REO
There isn’t really a “short sale” on an REO. REO means the bank already owns the property and sells it for whatever amount they want/can get for it. When you are trying to do a short sale, the homeowner still owns the property but the bank has to approve the short sale. Since they have to approve it, they can and usually will make you play by their rules. I’m not saying it can’t ever be done, but as a rule you will not be able to assign a short sale.
The bank owns the property from day one when they give you the loan, which is why they can foreclose in the first place. You may have full control over a property, but the bank owns the deed/title.
Can I do a double close?
Hi everyone. I am new to the board, but I live in Cleveland and have been an investor rehabber for 15 years. Every deal is different. We have 17 properties. Four of which were obtained on short payoff - one case, we had a land contract on the townhouse already, the property needed a lot of work and the bank actually sent someone out to take a look. We got it on short pay off for $20,000 and it’s worth $72,000 now that it’s rehabbed. We got another that was on the foreclosure block - we asked the owner if we could buy it on short payoff. She said she didn’t care. So we drafted a purchase agreement for $85,000. She owned $185,000 on this 11 suiter. We took the purchase agreement and gave it to the banks attorney and asked them to see if the bank would accept the short payoff because the building needed a lot of work and wasn’t quite half full. The bank said yes because they didn’t want it on their books. The building appraised at $180,000 and now after rehab appraised at $265,000. So each case is very different. You just need to be a little creative about it.
Do you want a bankers perspective?
If this is an REO, forget about assigning it. Create a corporation, the corporation buys the property, then sell the corporation. Or just do a double closing.
If this is a pre-foreclosure, you shouldn’t have any problem as long as you tell the bank your backing out, but so and so is taking your place. I really don’t care, just as long as the deal makes sense.
I would suggest contacting several title companies in the city you live in or plan to purchase in before trying this tactic because most of them here in Cleveland WILL NOT do a double close. The reason being is that the original buyer still needs to document that they bought and then sold the property on the same day - which they call flipping and flipping in Cleveland is illegal.
most of them [Title Companies] here in Cleveland WILL NOT do a double close
Most title companies in any state will not do a double close because they do not understand it. If they don’t understand it, they think it must by illegal. Contact your local Real Estate Investor Club and find out if there are any Title Companies on their approved vender list. Or just do a search for your area on Google, and make some phone calls. If you assume there are none, you will find none.
I am always amazed by the implication that title companies are dumb or uniformed, when reading all the posts like these. The reality is title companies are owned and operated by real estate attorneys. They certainly know how to do any legal transactions, they refuse to do illegal or questionable transactions. They also do not want to invest time and money into transactions that repeatedly never close.