The Ultimate Short-Sale Technique!
though with one no-brainer technique that if you key into Probate will make it VERY profitable for you. This has to "Short Sales" within the Probate process!
First off you must know that Probate exists for the benefit of creditors and NOT for the heirs. When someone passes away with a $5,000 Visa bill, the creditor has a right to claim their balance due through each state's regular Probate process.
One of the creditors involved that makes this work for the real estate investor is obviously the mortgage company/lender.
So, let me ask you how the lender feels sometimes about the status of their loan when someone passes away and there isn't
much money in the estate to keep the mortgage current. Let me answer that question for you and state they can be VERY, VERY motivated.
So now we've got a creditor who has a non-performing loan and because of many reasons they are willing to "wheel and deal". That is where the arena of short-sales comes into play that when you're "luckily"(right!), at the right place at the right time can mean a deal with chunks of equity to be had. These are the
types of deals that put you into true financial security.
Now, unless you're totally new into real estate or have been hiding under a rock then you already know that negotiating short-sales is an absolutely must have technique. This simply is getting the bank to accept a significantly lower loan payoff than is currently on the books.
Sometimes there are many steps that need to be followed in order to effectively negotiate a short-sale of an existing mortgage. One of those key steps in negotiating a short-sale
with a lender is the amount of information about the seller that needs to be produced.
Most of the time you'll be needing to gather the following information from the seller:
1) Current employment pay stubs
2) Financial statement of assets
3) Written proof of financial hardship
4) Hardship letter of seller explaining personal situation
5) Any additional bills or such verying financial hardship
6) Etc, Etc.....
Have you put this together yet? If not then let me spell this out for you. Everything I've listed above and more required by the lender is basically not needed when it comes to the seller having been deceased!
In the short-sale process you're seeking to really make the seller in the most unfavorable financial light as possible. The reason being is so that the bank will be first of all motivated to begin with and now when you couple that with the seller having passed away means they are much more attentive to your real estate investor special offer.
You will be able to find properties in the Probate process that there simply isn't any or enough money in the estate to keep the mortgage current. In other words, its going straight to foreclosure and in a hurry.
The Probate short-sale recipe for success then boils down to this: property heading to foreclosure and mortgage that is currently in default or soon heading to. All the cards are out on the table so to speak when presenting your offer in this light. Its now the lender's turn to accept or counter and helps put you in a much stronger negotiating position.
Of course there is a clear/conveyable title issue that has to be worked out, but this is a small hurdle to overcome within the Probate process. In fact its really the type of
"problems" you'll be glad to work through for that deal that has a huge chunk of equity in it.
Now, it will be up to you deciding if you should wholesale it for some quick cash or buy/hold for long-term equity appreciation. As you can see those truly are the types of
difficult choices in your real estate business you need to be making.
Invest in your personal financial future today with my,comprehensive system, "The Probate Profit Machine!". Good
hunting as luck has nothing to do with it.
First off you must know that Probate exists for the benefit of creditors and NOT for the heirs. When someone passes away with a $5,000 Visa bill, the creditor has a right to claim their balance due through each state's regular Probate process.
One of the creditors involved that makes this work for the real estate investor is obviously the mortgage company/lender.
So, let me ask you how the lender feels sometimes about the status of their loan when someone passes away and there isn't
much money in the estate to keep the mortgage current. Let me answer that question for you and state they can be VERY, VERY motivated.
So now we've got a creditor who has a non-performing loan and because of many reasons they are willing to "wheel and deal". That is where the arena of short-sales comes into play that when you're "luckily"(right!), at the right place at the right time can mean a deal with chunks of equity to be had. These are the
types of deals that put you into true financial security.
Now, unless you're totally new into real estate or have been hiding under a rock then you already know that negotiating short-sales is an absolutely must have technique. This simply is getting the bank to accept a significantly lower loan payoff than is currently on the books.
Sometimes there are many steps that need to be followed in order to effectively negotiate a short-sale of an existing mortgage. One of those key steps in negotiating a short-sale
with a lender is the amount of information about the seller that needs to be produced.
Most of the time you'll be needing to gather the following information from the seller:
1) Current employment pay stubs
2) Financial statement of assets
3) Written proof of financial hardship
4) Hardship letter of seller explaining personal situation
5) Any additional bills or such verying financial hardship
6) Etc, Etc.....
Have you put this together yet? If not then let me spell this out for you. Everything I've listed above and more required by the lender is basically not needed when it comes to the seller having been deceased!
In the short-sale process you're seeking to really make the seller in the most unfavorable financial light as possible. The reason being is so that the bank will be first of all motivated to begin with and now when you couple that with the seller having passed away means they are much more attentive to your real estate investor special offer.
You will be able to find properties in the Probate process that there simply isn't any or enough money in the estate to keep the mortgage current. In other words, its going straight to foreclosure and in a hurry.
The Probate short-sale recipe for success then boils down to this: property heading to foreclosure and mortgage that is currently in default or soon heading to. All the cards are out on the table so to speak when presenting your offer in this light. Its now the lender's turn to accept or counter and helps put you in a much stronger negotiating position.
Of course there is a clear/conveyable title issue that has to be worked out, but this is a small hurdle to overcome within the Probate process. In fact its really the type of
"problems" you'll be glad to work through for that deal that has a huge chunk of equity in it.
Now, it will be up to you deciding if you should wholesale it for some quick cash or buy/hold for long-term equity appreciation. As you can see those truly are the types of
difficult choices in your real estate business you need to be making.
Invest in your personal financial future today with my,comprehensive system, "The Probate Profit Machine!". Good
hunting as luck has nothing to do with it.
Comments(0)
I would imagine that the vast majority of these opportunities are nixed before they get off the ground by surviving family who assume ownership and thus responsibility for making the monthly payments. Is there a quick way to look past this to just those mortgages that are not being assumed by surviving family members? Thanks.
I agree with klayng. Could you give us more insight on how you narrow your search for these "finds" down?
We are working the preforeclosure/short sale area of RE. I have also taken our county's weekly probate list and started looking for out of state personal reps who might have no interest in the property...only 1 bite so far and the family wanted to get way too much out of the property! So, what is your secret (?) to finding the distressed heirs?
Your insight would be greatly appreciated!
No, I believe that simply sending a postcard that states you want to give someone "fast cash" and relieve them of an unwanted assett/liability with your contact info would sort through the people and if someone was interested they will call. Post cards are read by all who sees the mail, It works.