Short Sales

[rsupplee]

@chateaumanagement

Hey KV,

Is this person related to you? The reason I ask is if you care for them and they are not yet in foreclosure you might want to help them avoid it all together. If not, wait for the lender to file foreclosure against the property in the county it is located. If indeed the property is 50% paid off and there are no other liens against it then I would advise to refinance.

First realize that I do not know the entire situation so my advice maybe off. Based on what you wrote there could be a couple options for you.

Understand that a short sale is only available to properties in foreclosure. No lender will discount a loan BEFORE the foreclosure process starts. The closer a property gets to the auction date the more willing the lien holders are in working with you.

I tell you this because it looks like the property is not yet in foreclosure. So until it is you need to sit tight, but stay up to date with the property.

You say the property might be 50% paid off. You ask if you can take over payments or buy the home. Here are some questions that need to be asked.

1. Is this the primary loan?
2. Are there any other liens against the property?
3. Are the taxes paid current?
4. What is the appraised value of the property?
5. Is the property in Bankruptcy?

If the home is in fact 1/2 paid off and there are not other liens against the property I would suggest doing one of two things.

One: If the loan is assumable and/or if the lender agrees, you should take over payments. Part of that would be switching the deed into your name. Then you can turn around and sell the property for fair market value as an average real estate sale. Or you could keep it and leverage it out to purchase another property. Or you could keep it, refinance and put some cash in your pocket. It all depends on your situation and what you want to do with it.

Two: You could purchase the home from the homeowner for the amount of the current mortgage note (or a little more to give them some pocket money, you negotiate that with the homeowner). Then turn around and sell it for 90-95% LTV. The difference you put in your pocket.

Everything is based off of how the numbers work. The more equity the more room to work with. At the same time, in a short sale, the more equity the more it hurts your chances of completing a short sale. Properties that are over leveraged are ideal for a short sale.

Good luck to you, I hope this information helps.

To everyone else that has wrote to me…I didn’t expect such a huge response. I am replying, please be patient.

[chateaumanagement]

so is there a question or did you just feel like quoting me?

[kdhastedt]

You should feel special, Matt…LOL!

Keith

[Paladin]

HI Room,

I’ve been following the chat for awhile and with much interest since I’ve just witnessed a short sale go down right in front of my eyes and can’t believe what I’ve seen!

I’m an RE agent in St. Louis. A friend of mine told me about a house that was in the process of being rehabbed, but the couple got a divorce, stopped making their payments, and the house was going into foreclosure.

Meanwhile, I just so happened to attend a neighborhood association meeting and met a couple that “specialized” in short sales, and convinced me that I should let them “help” me get this property sold. I told them where the house was, and that I even had a buyer for the house if they could get the bank to take less than the 218K owed on the note.

They did the negotiations with the lending institution, and told me that they thought that they could get the house discounted to 155K.

I then informed my clients about the new price, they made a full price offer, and got the house for the 155K.

At closing, I asked the closer how much the ‘short sale couple’ got the house for and she told me 88K!!!

So…I found the house in distress, found the short sale ‘experts’, provided the buyers, and made a comission of 2.7%…BIg Deal!!

What that example has done, is it has built a HUGE fire under me to get into the Short Sale game ASAP and this time do it MYSELF!!!

I know of 2 more houses like this last one, in the same neighborhood.

I’ve done tons of research on the net, (which is how I found this chat room) and seen all the courses, boot camps, and programs out there that claim to teach you , step by step, on how to do a short sale. I even purchased a couple of books on amazon.com on the subject.

But I feel that I need a real live mentor that has ‘been there and done that’ with the lenders, HUD-1 statements, BPO’s, and so forth.

Any takers??

If not…I understand. It’s a pretty secretive club, and I’m sure that even Matt doesn’t have time to train a newbie, and still do his own deals.

Still…any advice would be greatly appreciated. I’m even open to splitting the profits on the first deal with the right teacher.

Sincerely,

Joseph
Paladin Properties

[dtrain50]

Matt, I have found a property that is in foreclosure. I think I would like to flip it to an investor with a short sale. I have most of the numbers from the bank. I do I protect myself when presenting the properties to other investors. How does the exchange of money happen and when, before or after closing? Thanks in advance!!

[chriscoles]

I am interested in doing short sales. A friend and I just started an LLC. I have read tons of books on this, but still would like any advice you can offer.
Thanks,
Chris