I’m getting more short leads, now that many investors in my state won’t touch distressed homeowner situations because of new laws here. I’m not afraid of doing them, because an investor buddy and I have logged quite a few hours working with an REI attorney to get counseling on the new law and to get our paperwork in order.
Anyway, I wanted to find out how experienced investors move their properties once the short sale is completed. I know that investors do double closings with cash buyers, but how do you sell short sales to retail buyers? In particular, I’m more interested in the logistics: Would I need to close on the property before I can sell it to a retail buyer, or is there a way around this?
There are many title companies that no longer do double closings. Of the ones that are doing them, are doing them more ethically than in the past due to laws that crack down on these types of transactions. In fact, in some states, it is downright illegal so check your state laws regarding this. If you do find one and are lucky enough to not live in a state where it’s illegal, then unfortunately, you have to close with the bank first. This means you have to have your funds lined up to purchase the ss. Then you can turn around and close with your end buyer and get your money back plus the spread. If funding the ss is an issue, I would google ‘Short Sale Funding’ and see what you come up with.
Moving shortsale properties is definately a science that can be mastered. One of the most effective ways starting out is to determine who is your prospective buyer. By that I mean another investor (wholesale cash buyer) or a retail buyer. Then determine the best way to reach your buyer. If it’s an investor then obviously you can reach out to them at your local rei club meetings or take numbers down from the ‘WE BUY HOUSES’ bandit signs. If it’s a retail buyer then you might want to establish relationships with realtors and brokers. Realtors that will list your properties in the MLS and brokers who can qualify buyers to purchase your properties. Relationships with these 3 professions are very important to any re investor.
I’ve heard that double closings are being scrutinized. I have a local escrow company that was doing double closings for awhile, but I need to verify that they are still doing them. I guess I need to keep lining up private money and lines of credit to close some of these short sales where a retail buyer is involved. I’ll see what others have to say on this issue.
In addition to being an investor I also own my own real estate office. So, I list all of my potential deals. Once the BPO is completed I put it on the MLS and keep lowering it until I get an offer.
If you want to double close short sales I strongly suggest using “dough for a day” companies. They can make fully funded front end closings happen but you do need the back end buyer to make the deal happen.
You just need to be a little more cautious and plan ahead. There is still lots of money in short sales.
If you need funding for your short sale and have a end buyer I can step in with my 50 mill LOC and purchase first and then we can re-sale to your end buyer since they are shying away from these properties.The only criteria your end buyer must close on the same day we buy the property first(Double close).I also have a title company that speclizes in double closes that my institution recommended and has worked wonderfully for me.If this fits let me know even for future transactions.
What are the new laws? Where are you located?