Yes Can you Whole Sale a Short Sale - Please read on

I called the organizer of the REICLUB I am member of and spoke to him about the Short Sale and whether it is legal.

He is experienced in Short Sale purchases so instead he would like to JV with me. He asked me to go visit the property with one of his associates or realtor and fill out the short sale package he will be emailing it to me.

As of now I am trying to co-ordinate the visit. Left a voice mail for the distressed seller.

Will pour more information here as it becomes available.

Thanks,
Bimal

Heard back from the seller, I am meeting with him on Saturday with the realtor my JV partner suggested.

He also sent me a Short sale package that I need to fill out with the sellers information, mortgage details etc.

Tonight he has arranged a phone meeting to go over the short sale package.

So things are moving in the right direction.

It would be very educational when I again put down the steps that were taken for this deal.

Stay tuned in.

Bimal

After co-ordinating the visit to the property tomorrow, the seller called meths morning and said he is going with someone else.

So no deal, I come close to something and there always is a slip.

Well but in the process I found a serious cash buyer and an agent.

Onto next one.

I will sure find a property soon. Time to take more action.

way to hang in there man it's coming

Hi Walt,

Thank You for the word of encouragement.

I am going to make it happen this year. I have started getting it now. Well every failure takes me one step closure to success.
Cannot wait to share my success stories.

Regards,
Bimal

I read this statement that promised it was the cure for failure

Keep taking action till you succeed

A quote I live by

“The greatest discovery of my generation is that a human being can alter his life by altering his attitude of mind”.
William James

Bimal, I'm impressed with your persistence. I have a suggestion that has worked for me. Find junk houses. Sometimes you have to look at dozens or hundreds to find a few good deals, but those few make all the hard work worthwhile.
Target houses that are not advertised, and def stay away from properties on the MLS and handled by Realtors, I've found my best deals on abandoned junk houses that sellers had given up on.
Rando

Can wholesaling be done although there has been a tax lien filed.

The amount due is not feasible to pay at this time due to circumstances

I've had deals that the liens were more than the house was worth, I contacted the city and they were unwilling to discount taxes owed.
I had one house the seller had to pay $3,600 in back taxes and code enforcement fines.
So it all depends on how much is owed.
Rando

Hi Rando,

It is all Thanks to you. For your push and encouragement.
I have located a rundown house, need to research the owner. I am getting calls from sellers from my Bandit sign but they are far out in rural area and none of my buyers are interested in those areas.

Let us see how things unfold. I also registered for a three day course cost $200/- . Opportunity to meet new investors also.

Bimal

good encouragement rando, i totally agree and love that qoute I am going to put that on my wall

Bimal, keep pushing my friend you are really close who knows you could have a deal by the edge ! i am pushing too, bandit sings put here too in san diego n it is tough not too many calls but am putting out more, also have leads coming of boarded up homes (thx rando I am following your advice about going after junkers:) greatr advice from rando.
dont give up bimal you are close push some more my friend , hope to see you at the edge.

Hi Tony,
I am glad to hear from you.
Randy has given us a great nugget of going after the Junkers. I am sure going to utilize that tip.

Bandit signs are helping too but responses could be slow. I get at least two phone calls every weekend from my 25 signs.
I am also very Thankful to Randy for providing help and guidance. Now it is up to me to capitalize on the knowledge he has imparted.

I will not be at the Edge this year but next year I will be there.

Wish you well and more deals.

-- Bimal

The following was written and published by Shomail Malik, A real estate investor in New Jersey :

Investing in a New Legal Landscape
In 2008, when I first started my real estate investment company, the landscape and rules of the game were nothing short of the wild, wild west. Following the collapse of Lehman Brothers, short sales had become a household name. For most, this was the single event that served as the tipping point for the onset of the global economic crises that would ensue from 2008 and beyond.
This chaos fostered many opportunities to buy pre-foreclosure properties at a deep discount, sometimes 20-60 cents on the dollar, and then flip them to residential re-development companies or retail buyers, with the purchase and sale taking place the same day. Within 24 hours, one could have purchased and sold a property, walking away with a nice five or six figure check.
Since the beginning of 2011, the legal environment as it pertains to the permissibility to flip short sale properties changed dramatically. It is difficult to pinpoint what exactly triggered the shift. Part of the blame points to investors themselves, who engaged in unethical strategies such as using straw buyers to flip properties along with a myriad other sketchy tactics. Bank of America instituted its famous item number 10 on their short sale approval letter, disallowing the re-sale of the subject property for the first 30 days, while other banks implemented 90 or 120-day hold periods. The broad-stroking language in the new Arm’s Length Affidavits was general enough to eliminate any chance that an investor would even fathom the idea of trying to flip the subject property. Further, by signing said document, one was bearing oath to adhere to the provisions and any breach would constitute perjury and serious criminal penalties.
With the legal landscape undergoing such abrupt changes, for investors, the options were clear: Either adapt or get out. Those that decided to forge forward sought out new and creative ways to transact these deals. After working with various law firms and picking apart what is and is not allowed, we were able to formulate three approaches that work within the legal framework provided by these foreclosing lenders:
1. Rescission or cancellation fee;
2. Joint venture with the end-buyer and then quitclaim deed after the holding period; and
3. Sell the LLC (entity) that owns the property.
In order to keep all of these options on the table, the very first element to make all of this work is to set up an LLC that will purchase the property. The LLC will be the buyer on the contract and the investor is simply the managing member of that LLC.
The cancellation fee method is carried out by the investor’s attorney, whereby the foreclosing lender is notified that the buyer of the short sale property (the investor) is being paid to cancel the contract so that another buyer can step in their place and purchase the property. Full disclosure is given to the bank as to what is to transpire, eliminating the chance of the short sale being rescinded and nullified in the future. The compensation for canceling the contract is held in escrow with the investor’s attorney and release instructions are drawn up to dictate that funds are to be released upon successful closing by the new buyer.
In the joint venture to a quitclaim deed approach, the bank is notified that the seller wants to bring in a partner to purchase the property. The language in the HUD and short sale approval letter must be adjusted to include the name and information of the new partner. This can be done in two ways:
1. Either an LLC can be formed with both partners being managing members, or
2. Two separate LLCs can purchase the property together.
An operating agreement is established for the LLC explaining any buy-out clauses to take place after the holding period requirement. On the day of the closing, the cash buyer brings the funds to the closing. These funds include the amount that the foreclosing lender will receive and the amount that the investor will receive, which can be held in the investor’s escrow. Additionally, the investor signs a quitclaim deed to relinquish his share in the property after the holding period has elapsed. The quitclaim deed and the escrowed funds are exchanged on the day after the holding period has expired.
The final approach is to simply sell the LLC that is to purchase the property. A membership purchase agreement is drawn up outlining the sale of the entity to the new buyer for the agreed upon price by both parties. Because the LLC is being sold, and not the property, the investor is able to stay in compliance with the short sale approval restrictions, but still accomplish the desired outcome. A CPA should be consulted with this approach regarding any tax implications as a result of the sale of the LLC.