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Short Sale Short Term Deals

Home Forums General EHTrust/EHT Topics and Creative Real Estate Financing Short Sale Short Term Deals

This topic contains 30 replies, has 0 voices, and was last updated by Avatar of homesavers NULL 10 years, 6 months ago.

Viewing 15 posts - 1 through 15 (of 32 total)
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  • #5621
    Avatar of homesavers
    NULL
    Member

    I was on the call this morning. I know this business changes everyday and we cannot use a method other than being very creative. I mention this subject almost 6 months ago. (see http://www.landtrust.net/board/viewtopic.php?t=7333&highlight=short+sales)

    We can find owners that are over-encumbered on the property and they have nothing to lose by doing a short sale. Former President Bush even put a stay of IRS execution from the supposed “captial gain”.

    We need to find qualified buyers that are willing to pay close to retail to execute these deals. This is possible but again it is not easy and that is why we can make big bucks.

    Let me ask a question how many short sales are selling versus REOs? If I am a buyer with a 620 FICO and income wouldn’t I want to buy at the best discount I could get? Close to wholesale? I am sure you can contract, negotiate and sell a shorted property but I think you would find it easier selling REO’s. One problem we cannot put them into a Trust.

    Also this method described on the conference call is being executed successfully by many investors out there. This is known as the A-B-C transaction. It goes like this: You Option with the Owner and record the Option. You negotiate with the lender. (BPO, preliminary HUD-1s, financial hardship letters, etc.) you find a buyer and sell to the buyer for Y because you negotiated with the lender for X. The spread is what you make in profit.

    If you can use a Trust, IFthe lender allows it, then you are way ahead of most investors.

    Let’s go to it! Remember though if I was a qualified buyer I am looking on the MLS and probably using a buyer’s agent to guard my position. Agents do not like Short Sales they take a long time. So they can find a lien stripped, clean REO they will offer on it at 50-60 cents.

    #29254
    Avatar of kevinscott
    Kevin Scott
    Member

    I also was on the call. My question is more basic.

    What PROBLEM are we solving with this transaction?

    I see short sales are on the market.
    I watch buyers buy them everyday.
    I sincerely don’t get all the fuss. (I’m missing it, I know).

    Is the problem we solve…
    1. Buyers with good credit (able to get a bank loan) but have little nor not enough downpayment/closing costs?

    2. Sellers, who want to stay in their home, but get their RELATIVE/FAMILIY member to “buy” so the seller can stay and pay less?

    3. OR is this simply an exercise to create(take advantage of) an opportunity for unlicensed individuals who otherwise would be able to
    simply LIST & SELL over-encumbered (shortsale) property?

    Sorry. I don’t get what specific problem(s) all these “gymnastics” are solving. Sorry, if I’m just too dense. Somebody please help – in PLAIN english. (It maybe sounds like something I wanna jump on, I think, maybe.) Muchas Gracias. :)

    #29255
    Avatar of sstanton
    sstanton
    Member

    @Homesavers wrote:

    If I am a buyer with a 620 FICO and income wouldn’t I want to buy at the best discount I could get?

    With a 620 FICO, you would barely qualify for an FHA loan on a home valued under 417K with 5% down and 50% of the closing costs (Note: FHA rules change constantly, so this may be dated now.) Not everyone wanting to buy a home will have the 5% and the 50% of closing costs. We can solve that for them. We can get the home at 50-60% and mark it up to cover our costs and get them in with about $2500 cash out of pocket if that is what it takes. Those that have the cash, let them buy homes on their own.

    @KevinScott wrote:

    I see short sales are on the market.
    I watch buyers buy them everyday.
    I sincerely don’t get all the fuss. (I’m missing it, I know).

    Not all buyers have the cash to do that. We can help them.

    Sellers have a property they want to unload. Get them under our non-exclusive control for now and let NARS “rock”. In the meantime, work on a buyer yourself too.

    Try not to make this to complicated. Let NARS handle the complicated part.

    That is my take,
    Stu

    #29256

    @homesavers wrote:

    We need to find qualified buyers that are willing to pay close to retail to execute these deals.

    No, “YOU” do not need to find Buyers and No, they don’t always need to be paying close to retail. BTW, retail is whatever someone is willing to pay.

    @homesavers wrote:

    Let me ask a question how many short sales are selling versus REOs?

    Just recently a report came out to Mortgage Bankers and Brokers that only 8% of Short Sales are closing. The question you need to ask is… Why?

    The answer is that because things change so fast that by the time the deal is ready to close, the lender’s conditions have changed and the deal is no longer profitable or the borrow has lost their interest in the deal.

    That’s why what we do and the way we do it is sooooo important. We negotiate terms with the lender and then come to the table with a ready buyer who can immediately purchase and fund… NOW! No Waiting!!!

    @homesavers wrote:

    If I am a buyer with a 620 FICO and income wouldn’t I want to buy at the best discount I could get? Close to wholesale? I am sure you can contract, negotiate and sell a shorted property but I think you would find it easier selling REO’s. One problem we cannot put them into a Trust.

    If, if, if, if. If I only could I would. Seems to me a lot of “ifs”.

    If you had a 620 score, you aren’t going to qualify and at 620 you’ll need substantially more down.

    Wholesale, what’s wholesale?

    If you think you can Contract, Negotiate and Sell a Shorted Property, then why don’t you just do it?

    If you think it is easier and more profitable to sell REOs, then by all means go ahead and do it too.

    You are not going to get any better discount with an REO on a good bread and butter property, one at a time, than with a Short Sale. Unless you buy large blocks of properties you are not going to get better than 60% to 70% on an REO. And, as you pointed out, you won’t be able to use a trust. But…

    In the current market you will have a better chance, and one property at a time, of getting a 40% to 60% discount, if you do a Short Sale, perhaps using a “Private Auction” first before going to the Bank.

    Now you have one property at 50% or less with an End Buyer already pre-qualified and ready to close.

    @homesavers wrote:

    Also this method described on the conference call is being executed successfully by many investors out there.

    This is where you are totally mistaken. No one but no one is using or can do what you heard on the call today, NO ONE!

    @homesavers wrote:

    This is known as the A-B-C transaction. It goes like this: You Option with the Owner and record the Option. You negotiate with the lender. (BPO, preliminary HUD-1s, financial hardship letters, etc.) you find a buyer and sell to the buyer for Y because you negotiated with the lender for X. The spread is what you make in profit.

    This IS NOT what you heard on the call today and IS NOT what we do. Why? Because only 8% of these type of transactions ever close.

    “IF” this is what sooooo many investors are doing, then why don’t you do it too?

    @homesavers wrote:

    If you can use a Trust, IFthe lender allows it, then you are way ahead of most investors.

    There are no “IFs” here, we are doing it and YES, we are waaaaaaaaaaaay ahead of not most investors but ALL Investors.

    @homesavers wrote:

    Let’s go to it! Remember though if I was a qualified buyer I am looking on the MLS and probably using a buyer’s agent to guard my position. Agents do not like Short Sales they take a long time. So they can find a lien stripped, clean REO they will offer on it at 50-60 cents.

    If, if, if, if, if, if, ……………………………………………………………………..

    “IF” you only really understood what you think you know, you’d be doing it.

    #29257
    Avatar of kevinscott
    Kevin Scott
    Member

    Ok. Sounds like our approach is great for buyers who only lack sufficient downpayment & closing cost money. Buyers income and DTI is fine. They just don’t have enough cash on hand to close a traditional transaction. Is that right? Just tryin to K.I.S.S.

    #29258

    @KevinScott wrote:

    What PROBLEM are we solving with this transaction?

    1. CASH
    2. NO SEASONING
    3. TIME
    4. NO DOWN PAYMENT
    Just to name a few.

    @KevinScott wrote:

    I see short sales are on the market.
    I watch buyers buy them everyday.
    I sincerely don’t get all the fuss. (I’m missing it, I know).

    - Yes, you see a lot of properties “listed” as Short Sales
    - NO, you don’t watch buyers buy them everyday, only 8% ever close as Short Sales regardless of the method/s you are using… until now. BTW, our closing percentage is as close to 100% as you can get.
    - The fuss is over the other 92% and the 8% we can do better on.

    @KevinScott wrote:

    Is the problem we solve…

    We aren’t solving any “problems”, we’re eliminating them.

    Through our “method”, we will buy at a substantial discount and sell at a fair discount to end buyers. We can do this easier, faster, safer and all WITHIN THE LAW!

    For those that think you can do all this using an Option, be my guest, give it a try. Show me a conventional lender or title company that will allow you, with full disclosure, to get paid “BIG BUCKS” on your option from a one or two close Short Sale Transaction or Flip, without flipping.

    #29259
    Avatar of sstanton
    sstanton
    Member

    Silly question (perhaps stupid), but, do we just fill out the seller questionaire or do we attempt to get them to sign the NEO that states we want to hold the property for 3-10 years?

    Or, is there going to be an NEO for the short term deal?

    OR, as mentioned on the call, just put them into the trust?

    Ok, I am still a bit cofused on the front end with the seller…

    Stu

    #29260
    Avatar of dave salcido
    dave salcido
    Member

    @sstanton wrote:

    Or, is there going to be an NEO for the short term deal?

    OR, as mentioned on the call, just put them into the trust?

    Ok, I am still a bit cofused on the front end with the seller…

    Stu

    If the seller is ready to go short, let’s just create the trust and beneficiary agreement, get the seller to sign and let the negotiations begin.

    #29261
    Avatar of homesavers
    NULL
    Member

    @Scott_L._Moyes wrote:

    That’s why what we do and the way we do it is sooooo important. We negotiate terms with the lender and then come to the table with a ready buyer who can immediately purchase and fund… NOW! No Waiting!!!

    Okay Scott. The underlined part is my big obstacle!!! I agree with you 100 percent in everything you say. My salesmanship is not as good as yours but I am an educated guy. I have had several short sale deals in the last few months where the owner was willing to work with me. I lost a few fumbling around with committments and paperwork not coming in from the seller.
    What I am trying to say is there are methods out there to close short sales. Is your’s the best? Maybe? Is your’s the easiest to figure out? No. You say you are finding “ready buyers”? Well I will say one thing! How many do you want me to give you? Am I going to have to pay anything to you?

    I do not like the idea of having 6 Short sale properties under contract and not have a good marketing system to bring in the “ready buyers”. IF you have that system and can bring in buyers then let me just send you a baker’s dozen and then you can put your ” ready buyer who can immediately purchase and fund”. I promise you I am not being sarcastic in this post. I am serious.

    Only 8 percent close because the lender keeps changing the requirements? No wonder why they are getting a lot of REO’s. I did not realize the bankers were that stupid!

    #29262
    Avatar of homesavers
    NULL
    Member

    @sstanton wrote:

    Sellers have a property they want to unload. Get them under our non-exclusive control for now and let NARS “rock”. In the meantime, work on a buyer yourself too.

    Try not to make this to complicated. Let NARS handle the complicated part.

    That is my take,
    Stu

    The complicated part is finding a buyer for these. I have several that have agreed to have me work a short sale for them. You say “let NARS handle the complicated part” You mean NARS is going to find a buyer for me? I do not need them to help with anything else.

    #29263
    Avatar of bolieunj
    bolieunj
    Member

    If you have several that agreed to have you do short sales, aren’t you working with NARS and REAP already?

    If you are getting these types of transactions and can’t make them work or don’t know how to make them work and don’t want to work with NARS, I’d be happy to give you a referral fee for those and close them myself with NARS.

    Leon

    #29264
    Avatar of homesavers
    NULL
    Member

    Well I have about 6 that agreed and yes I have sent 4 of the solid ones to REAP. I usually have them all in agreement after the 2-3rd contact. What can you do with them that I cannot? You got buyers? Let’s deal if you do. No buyers than there is really nothing you can do.

    #29265
    Avatar of bolieunj
    bolieunj
    Member

    Post them in the deal makers section if you’re looking for a buyer and here if you need them evaluated.

    #29266

    @homesavers wrote:

    Well I have about 6 that agreed and yes I have sent 4 of the solid ones to REAP.

    Dear Donny, you’ve sent some deals, some of which may have been carelessly misplaced, as we haven’t seen them. It’s hard to work with half completed NEOs with no supporting documentation at all, but hey!. That’s it, nada, nothing, zilch, zero. We’ve not had one opportunity to speak with or negotiate terms of any kind with one Seller or their Realtor. None, nada, nothing, zilch, zero….but we love you anyway, you little trooper.

    Remember that “yeahbutts” are little rubber bullets that folks shoot their toes off with. Unless you’ve sent COMPLETED FILES, our hands are tied and any failure in our process and methods are unlikely…you little dickens, you…you should know that.

    Please, Huggy Bear, unless and until you’ve done a deal or two, beware of offering advice here as others might take it, then mess up and blame you for it…not a good thing (uh uh…nosiree).

    Tsk Tsk for telling us all why it can’t be done or how it should be done another way, unless you have the other way ready to go. You quite rightly know about half as much as you think you know: but that is the nature of Mankind if we all knew as much as we all think we know, we’d all be speaking Martian by now…my little Booby Doop. Please, just stop already (oh kay Kiddo??).

    My advice, you little booger you, is to put duct tape over your tiny little fingers and take a break while we all take our nappy-poos. When you can learn to do as we ask and pay us for our time and advice, and have worked with us to complete a transaction or two, then you will get richer than Old Cooter Jones (a cute little southern homily) then we’ll all clamor to see just how you’ve DONE IT.

    Until then, quit peeing in to my wind and crapping in my cheerios.

    Now, let me explain what I mean by that: First off, if you tinkle when the wind is blowing and I find myself downwind, I might get tinkly winkly on my new beanie cap. And, by the same token, if you do to my cereal what little mouses sometime do, by going pooply-poop in it, I might bite down on what I thought was a raisin and find the taste to be off a bit. I say this, Donny Poops, because in my past experience, every time I’ve tasted mouse droppings, it’s made me go all silly and noodle-soupy for the rest of the day (I actually ate a friends pet monkey once just to get the taste out of my mouth). So dropping the kids off to swim in my bowl is a no-no.

    With all my love and kisses, please write soon,

    Scotty and the NARS group of fantastic people who never criticize anyone on this freaking website

    #29267
    Avatar of homesavers
    NULL
    Member

    @Scott_L._Moyes wrote:

    @homesavers wrote:
    Well I have about 6 that agreed and yes I have sent 4 of the solid ones to REAP.

    You’ve not sent one solid one to us yet. You did send a half completed NEO with no supporting documentation at all. That’s it, nada, nothing, zilch, zero. We’ve not had one opportunity to speak with or negotiate terms of any kind with one Seller or their Realtor. None, nada, nothing, zilch, zero.

    I’m fed up with all your yeahbutts and excuses. Unless you’ve sent COMPLETED FILES, don’t lay your failure on our process or methods.

    Please, unless and until you’ve done one, don’t offer others advice or tell us all why it can’t be done or should be done another way. You don’t half as much as you think you know. Please, just stop already.

    My advice is to put duct tape over your fingers and take a break while giving us all one too. When you can learn to do as we ask and pay us for our time and advice, and worked with us to complete a transaction or two, then you can come on the discussion board and tell us all how you’ve DONE IT. Until then, quit peeing in to my wind and crapping in my cheerios.

    Good one, Scott. Good Tactic. Shoot the messenger. Everything I post here is from real life experiences. I have been a NARS member for 4 years. Get that “burr” out from under your saddle.
    Make some calls to the Sellers! I sent REAP (David) three Prop forms and 1 NEO. You have the name, address and telephone number of these sellers and info about the property. What the heck else do you want? The NEO was signed by the seller only.
    I had one in Redlands, Modesto, Lemoore and Folsom, California. Just call these people a make a deal! What else do you need? I already called them and they agreed. You close them. I will follow up via your direction. What is all this unprofessional talk about urine and cereal.

    Anybody wants to see I can post the Prop Forms and NEO if you like. Maybe you (Scott) just did not get the paperwork from me I don’t know.

    After this post I think I am going to take your advice and stop posting here. I guess I do not need your help after all.

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