Short Sell HELP!!

Need some advice, I have a property that will go back to the bank in a few months. My BK was discharged May of 07, went through a divorce & was laid off from work in 05. My credit is improving but it’s not where it should be. I have a LLC that will hold a few properties. Question is is it possible to do a short sell from me to the LLC?? And if so what do I need to know to do this???
Owe on home 770,000
A BPO has not been done yet
Comps are coming in around 600,000 - 695,000

How on earth did you get so upside down on this mortgage? You larger problem is going to be finding a lender who will lend to an LLC at a high LTV. Even if the current lender comes off the price by 100K you will still be at 100% LTV possibly much much worse. You may just want to let this one go and start over.

The loan amount doesn’t matter compared to the value of the property. It was the lenders underwriting that accepted the loan, thus it is partly their fault in over leveraging the property. IMO, you will need to have strong supporting documents showing the current value of the property and a reasonable short sale offer.

Depending on the repair costs and other liens, taxes, etc. the lender may be willing to accept a payoff within $100k of the property value, not what they are owed. From the info provided, I would possibly consider starting with an offer of $500k. But more info would be needed to know for sure.

Finding a lender to loan to the LLC will greatly depend on how much the payoff(s) are for and what equity is left in the property.

Let us know what the BPO comes back as.

Thanks everyone for your voice.

If you think of anything else PLEASE let me know. For a title search they want 500.00 (title Co.) for liens and taxes

I added 10,000.00 to the Owe on home price to make it the 770,000.00, it might be a little higher, repair costs not much needing front & rear yard cleaned up reseed, sprinklers & inside house painted approx. 5,000 I budgeted a little over there’s always little extra things that pop up.


I’m fairly certain you can’t short sale your own property (even though another entity). Well, perhaps technically you could, but I wouldn’t suggest it. Your bank would have a real problem with that if they found out. But, an earlier post had the better question: How on earth would finance it through the LLC? Obviously, an all cash offer isn’t on the table, so I’m not sure how you envisioned this one working out. You’re much better off trying to find an investor to make an offer.

Although a corporation, LLC or any entity can purchase property, banks do not allow family members to purchase the property in a short sale. So if your name is John Smith and the LLC is called John Smith, LLC. or The Smith Family, LLC., You will have an issue.

You construct it as a normal purchase contract. Where you are the seller and the LLC is the buyer. You fax that contract in, with a letter of hardship, your financial records and an estimated HUD-1 and then you await an answer.

I do short sales in Southern California and I see these numbers frequently. What you will need to do is to feed the BPO the 600k comps and hope that he/she uses them. Your purchase price should be 500k. If the BPO comes back at 600k, you have a good chance of getting accepted. If the BPO comes back at 650+, they will counter and you might see yourself paying around 550-570k for the home.

Good Luck