Short sales risks involved

As a new investor that hasn’t done a deal yet, I want to get feedback if I should stay away from short sales for right now until I get some experience under my belt or if there aren’t many risks involved??

If I successfully negotiate a deal, but can’t find a buyer (if wholesaling), I just lose my earnest money? What are the risks involved in short sales?

I feel like part of this is fear (on short sales), but at the same time I don’t want to get in over my head and what I don’t want is another investor that just fails.

I just want to be sure about what I’m getting into with short sales and what I need to be “prepared” for?

Learn how to use the option method for setting up a back-to-back transaction and the risks are minimal.

  • Gives the investor specified control.
  • Gives investor right to market and sell
  • Gives investor the vehicle to avoid ownership liabilities
  • Allows the investor to reduce closing and financing costs
  • Allows the investor to close using a back-to-back transaction

Its also a completely transparent way to conduct short sales.

Thanks for the reply. Can you elaborate a little further about “option method”? Are you referring to a double close when you say “back to back”? Can you refer me to some posts or other reading material that covers this in more detail?

Thanks again.

Can you please elaborate?

Are you referring to simultaneous closing here?? If so, this is illegal in TX and I can’t do that. Title co’s won’t do it here. I can however do a double close, will that suffice and if so what do I need to do? Perhaps I need to talk to my title co about short sales…

If I cant get a buyer to make me a profit, I try to convert it to a listing and just take the standard realtor commission.