OfflineHelped out the homeowner in a very distressful situation and got the short sale done and closed.
The short sale took about 6 months from start to finish. Got a verbal approval within 4 months but took the lender a couple of months longer to get the approval letter to us. The lender was very slow in the processing of the short sale. Put in an offer and negotiated the offer with the lender which was accepted and then had the agents market it to find an end buyer and got an A-B and B-C transaction done on the property. Walked out of the close with a check.
Homeowner was very happy and lender gets a payoff on the property and we get a property at a discount and sold it below market value.
A win-win-win situation for everyone involved.
__________________
so you get the seller to agree to a short sale, have them sign a contract and make the bank a first offer
then you get comps and lists the house under maket value to get some action on the house using a realtor
then once you get a offer you tell the buyer it is subject to bank approval and work out the numbers (fees and your profit) and then see if the bank take yours adjusted offer
am i understanding this correctly?
what do you tell the seller when you listed the house at a higher price than the contract you had them sign to make the bank your first offer?
Thanks
Brian
Brian, what you described is a VERY simplified version. I am currently working on my first short sale deal and they are by far the hardest to maneuver. There is a lot of paperwork involved and I don't mean just from the bank, but paperwork to cover your rear end. In CA, if you even appear to be a foreclosure consultant and you get sued you're toast. You could end up owing the seller 100's of thousands of dollars. New investors who are blindly going out there to do short sales and succeeding are VERY lucky they had a successful outcome. I am not steering you away from the short sale, I am just telling you to research your laws in your state, get with an attorney and make sure you're doing this all the right way. Much of the information can be found by googling your state laws. Please don't go out there, make an offer without having a system and checklist to conduct a short sale. Laws are changing every day and the policies are becoming very harsh to people who break them whether it was intentional or not. My suggestion is to get with a local investor or real estate agent who is successful at doing short sales and talk to them. Let them educate you. Don't forget the seller could have 2nd and 3rd liens, back taxes, etc. You need to know how to find all this out. If they do have junior liens you don't even want to talk to the first lien holder until you know you can get the junior lien holder to reduce or write off the balance. You need to know your numbers, closing costs, etc. An agent can be very helpful if they know you're going to be bringing them the leads. Good luck...
KimmyJ
Press on...
www.tagteampropertiesllc.com
Brian & KimmyJ,
Agents, attorney, and negotiators are great to have on your team. Mortgage brokers are helpful also. About working with the junior liens, my experience is that we have had to have the 1st mortgage taken care of for the short sale before the 2nd or 3rd will talk because they are not in a good position to get any money. They want to see the approval letter from the 1st mortgage before they will decide. The first lienholder is the one that wants the short sale paid all to them. It is all in the negotiations but usually we offer a percentage of the balance to the junior lienholders so that they will work with us. For example one short sale that we did the balance of the second was $52,000 and we shorted that to $5000. Not bad. But all lenders and the junior lienholders have to be in agreement.
Short sales are a difficult process but it is truly rewarding when it is all completed. There are so many components to a short sale that it is hard to explain everything so that you will understand. I hope this helps.
Like I have stated before that short sales are not short. Timing is critical.
Laura
www.bmwinvestproperties.com
Thanks for this info as im also looking into short sales here in california. I do have this question though. When you do the A-B then B-C transaction what type of fees are you going to have to pay? Say you are the buyer(which it sounds like you are) do you have to pay the closing costs for the A-B transaction. Then when you do the B-C did you have to pay any capital gains since you "bought" the property then sold it for a gain?
Thanks Again, Ron
Laura!! Sounds like you are on your way. When it comes time, I might have to pick your brain for some short sale nuggets.
Congrats!!!
Lonnie...
Don't forget to play hard after you work hard!!!
Why team building is important, "You can't know it all. No matter how smart you are, no matter how comprehensive your education, no matter how wide ranging your experience, there is simply no way to acquire all the wisdom you need to make your business thrive." DONALD TRUMP
Ron,
When purchasing the property on the A-B side, the lender generally will let you know what they will accept on closing costs in their approval letter after negotiations are done. You will put them into your formula so that you will know what to offer. On the B-C side we usually sell the property under retail value. We hold the house for only a few minutes to a few hours and that is all. The closing is never longer than 24 hours. On your gains and what tax implications always check with your own tax professional.
Laura
Congrats!!!
Lonnie...
Thanks and if you need to know something just let me know.
As a matter of fact--Just today just sent off the paperwork to the title company in another state that we will be closing another short sale that we have done. Closing is for next week!!!
Laura
www.bmwinvestproperties.com
This is a great success story! Short Sales can be very profitable if the bank is willing to negotiate. I am currently focusing on Short Sales and have built a team that takes care of Each Short Sale from a -z. My Negotiator ( who is also an Attorney) gets the Short Sales done in 45 days which from what I am hearing is record time. If you are going to do Short Sales it is good to build a team since it can be a very time consuming process.
My Team consists of
Negotiator ( Attorney)
Assistant ( gets all of the paper work together from the seller)
Agent ( gets me Short Sale leads and re lists the property if necessary)
BPO Agent
A good way to find Short Sale leads is to advertise for them...
I Buy Short Sale Leads!!
Do you know anyone who is behind on their mortgage, facing foreclosure or has a financial hardship and cannot pay their mortgage?
I will pay you $500.00 for every one of these leads!
Call me at XXX-XXX-XXXX
You can put this in craigslist or your local newspaper.
Do not fear, for I am with you; do not be dismayed, for I am your God.I will strengthen you and help you; I will uphold you with my righteous right hand. Isaiah 41:10
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To your success,
Carol Stinson
My Team consists of
Negotiator ( Attorney)
Assistant ( gets all of the paper work together from the seller)
Agent ( gets me Short Sale leads and re lists the property if necessary)
BPO Agent
A good way to find Short Sale leads is to advertise for them...
I Buy Short Sale Leads!!
Do you know anyone who is behind on their mortgage, facing foreclosure or has a financial hardship and cannot pay their mortgage?
I will pay you $500.00 for every one of these leads!
Call me at XXX-XXX-XXXX
You can put this in craigslist or your local newspaper.
Carol,
Sounds like you are on your way also!!! Loved your story of success.
I do believe that having a team in place is always the key to success. Stay positive when trying to put the team together because sometimes you will have to got through a few to find the right person.
Your attorney must be very good and to get the short sales negotiated that quickly is great!
My quickest one that I negotiated personally was 49 days to an approval.
Not all of them are that quick though.
Always stay positive and creative and you will make your goals and dreams come true!
Laura
When i get a short sale lead from my realtor(s), what would be my next step in getting this property negotiated and closed ? Do i need to get my funds from a hard money / private lender ? or a transactional fund to purchase the property, have my realtor re-list it lower to attract buyers ? or should i try to have a buyer lined up first ? i need a little assistance
Just stoped in to say cong on closing a deal. As long as you are taking action the deals will keep coming.
Randy
www.adeptpropertiesllc.com
Please pm me what you are needing.
I will be glad to help you.
Laura
Randy
Thanks Randy!!
It is so encouraging and great to have the DG family for the support and kind words.
Laura
www.bmwinvestproperties.com
Laura51,
Hi I wanted to ask: what do you think is a fair price for a short sale referral fee? A flat fee or a percentage of the deal or?
Hello Rina, if you or any investors out there would like to work with me on shortsales for owners that want to stay in there home and lease option it back to them with a right to purchase in 5 to 10 years would this be something that you are interested in doing?
Laura,
Awesome job first of all!! You and few others doing shortsales keep me motivated to keep on going. Right now we are still working on our first one here in Ohio.
We are still having issues with agents and the whole flipping/flopping thing but whatever. Gonna meet 2 more agents today. Its a numbers game right?
Anyways keep kicking butt and thank you for taking the time to speak to me a few times over the phone to help me with my shortsale business!
Look foward to hearing another success story from you and talk to ya soon.
Jason B (Akron, Ohio)
You Can Have and Be Anything you Want!!
Jason Bly (The RE_Situation)
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Laura ,
Always glad to hear of you completing another deal. Nice profit on this one as well.
You were one of the originals that inspired me to attempt real estate and it's great to hear of your continued success.
Randy S.
Elkton , MD
Hope you all are doing ok after the latest storms. Thinking and praying for Missouri!
SEMPER FI
GET SOME!
Jason,
Thank-you for the great support! You are very welcome for talking with you and helping you get through your business. Anytime!
Keep meeting agents. A lot of times it will take going through many of them to get that one that is ready to work with you. Remember to interview them. They will be working for you.
Laura
BMW Investment Properties LLC
Randy,
Thank-you Randy for the great support and the nice compliment.
Keeping pushing forward for the deals and they will come!
Continued success!
Laura
BMW Investment Properties LLC
www.bmwinvestproperties.com
Thank-you for the concern. We are alright with the latest storms. The storms were south of us but we are suppose to have severe weather tomorrow.
We are also praying for everyone who has been touched by severe weather everywhere.
Laura
BMW Investment Properties LLC
www.bmwinvestproperties.com