Short sales risks involved

Foreclosures, Short Sales, Tax Foreclosures
1

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?

2

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?

3

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.

4

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.

5

Can you please elaborate?

6

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…

7

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.