Getting Some Short Sale Things Strait
Oay, i have a few questions. i have a short sale going right now on this one prop where they are sending out for a bpo this week. well my question is this. when i get this accepted i will find my buyer and set up a closing quick. ..will the bank have a rep. at closing? this is what i am wondering. So i will actually be "buying" the prop from the "owner:" of the house (being the lady who is forclosing) and actually just paying off her loan at a discount price (short sale). so therefore the money i get from my buyer will satisfy the short sale discount price which will allow me to own the prop and then i will sell to my buyer...So i will be buying the prop from the women forclosing? correct? not the bank. im just satisfing their loan and that it.? as far as this hud 1. will there be a prob with the hud 1 where the bank will somehow find out that i am making a huge profit on the house?thanks, Ryan
You are buying the house from the owner...not the bank. The only difference is that the payoff from the bank will potentially be lower.
If this is the same property that you talked about in another post, THIS IS NOT A SHORT SALE PROPERTY!
You will not be able to have your seller sell directly to your end buyer. You will have to double close.
The problem that many, wannabe speculative investors face happens when they try to combine acquisition techniques...
You are trying to gain mortgagee, preforelcosure short sale approval, then flip or assign the contract. That's tough, even for experienced players.
Shorts are most profitable when the named purchaser acquires title, rehabs or renovates, then sells at the enhanced market value.
why is this tough? what if i already have a end buyer lined up who is pre-qualified? would be be fine to get a prinate money lender to fund it then rehab it and sell it to them?
If what you are suggesting is a double close or a simultaneous close, that's OK.
If you decide to acquire the property, rehab and sell to an end-user... what's wrong with that?
I think JBR is in deep do-do!
I'm sitting here doing and FHA short right now and this is what I'm reading into this post:
JBR has "probably" made a really short bid on the subject property hoping he will get it at his bid price.
That is a wild speculation in itself as short sales really don't fly in the higher margin range unless they are basket cases.
IF the deal has THAT much profit, the bank ain't gonna let it go UNLESS the BPO happens to come in low - good luck, realtors suck.
I think you should buy the SS Pro's book before you waste any more time. I am dead serious. I work with senior asset managers
wtith GMAC, BankOne and Countrywide and the ONLY reason I'm doing a short right now is because it is an FHA.
Hope this helps a little.
C- :-o
If you are worried about a double close, you may want to try set up a trust and use a double escrow. The one escrow will have the sale going thru it and the other the assignment fee which will go to your self. This way in the eyes of the mortgage co. there is only one close.
Robert
BINGO! That's why it's so important to have a business plan and an articulated exit strategy.
I've also found that some lenders are now not quite so strict about substitution of Purchaser.
[addsig]
well here is the case. The prop im trying to short sale has a lot of issues. The reason the "owner" is not making payments is becasue her husband murdered somebody in the house. therefore nobody wants to buy it. she owes 139k on it, after missing payments and fees etc. she now owes 147k. here is the catch. Right before her husband murdered the other guys they started remodeling the whole house. therefore the whole house has been torn apart in the inside. really bad floors throughout and half ripped down plaster. etc. etc. i sent a short sale pack to the lender with a total pay off of 80k. With the work that it needs i would not pay more than 105k for it. i sent in a net sheet and comps and estimates. they said they will have a appraiser contact me in a couple of days. im thinking the BPO will come in at about 110k. now, i have a buyer who may be interested in it at 150k i planned on a double close at this point. how does this sould now that you know all the details? Thanks, Ryan
P.S. the double escrow thing seems a little strange. can you please explain it to me? thanks[ Edited by JBR_Consultants on Date 09/15/2004 ]