Let's start off by defining what a short sale is. A short sale is when the bank accepts a lesser amount than what is owed by a borrower as full settlement of that borrower's debt. So if you were to purchase a short sale, you would be buying "short" both the market value and the mortgage's principal balance. Short sales are not for the faint of heart and they do not convert overnight; however, they make for very healthy profits if executed correctly.
If you haven't established a down-line in your real estate investment business, you are new to investing, your time is not blocked correctly, or you aren't that confident yet; STOP. LOOK. READ. Lesson #1 on short sales is that you don't have to do them. It is very time-consuming to get the lead, call the lead, convince them that they have no equity and could potentially be upside down, call the bank, submit the packet, show up for the Broker Price Opinion (BPO), wait for the counter, play poker with the loss mitigation department, and MAYBE get an approval. Don't get me wrong. If you are able to get that approval then you will certainly make tons of money from the deal, if you follow the "system" I talked about in another article. But you don't have to do all of that work.
Just like with the REO properties, find a hungry Realtor who is looking for business and have them scrape their 180+ listings for pre-foreclosure situations. Have them convince the sellers to agree to sell for what they owe and let them contact the bank to negotiate a short sale if necessary. You in turn, fund the deals with private money, hard money, or cash, and the realtor gets a property sold that would in most cases be sitting for another 180+ days. Not all of these deals will end up as short sales. Some of them will end up being GREAT BUYS without going through the bank. At the end of the day, with or without a bank type purchase, the agent gets theirs. That's all they want anyway!
Note: Banks love working with LICENSED professionals. The Realtor will have a much easier time effectively communicating with the loss mitigation departments at these banks, then you will as an investor. So now you should have a couple of effective ways to use agents as bird dogs and you just sit back and raise private funds to put on all the deals that agent gets approved. It's a Real Estate Investment Business on Auto-Pilot and it's almost better than THE REAL ESTATE INVESTOR IN A BOX product my business partner and I have put together as a "Done for You" service to the lazy investor. You can be a successful Real Estate Investor without ever buying or selling a home. Think about it. If you have questions about that you need to visit my site at www.miltonyates.com.
Blessings to your Real Estate Investment Successes,
Milton B. Yates
www.miltonyates.com
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment