Real Estate Investing Blog

The basics of short sales are pretty simple:

(source)Short sale investing involves buying a piece of property from a lender for an amount less than the balance owed on the property. Basically, there are two types of short sale realty investments. The first type refers to when you purchase a property, foreclosed by a lender listed with a realtor. In this type, you simply offer the lender, who has now become the owner on record, less than what is owed on the property. In this case, you can offer less than the balance that was due on the foreclosure. Such a short sale, realty investment calls for a good relationship with the realtor. The other type involves negotiating directly with the lender of a motivated seller.

When you’re thinking about taking advantage of short sales as a foundation of your real estate investment, you’re going to find that you are definitely working with motivated sellers. After all, banks are in the business of lending money, not in the business of owning homes; that definitely adds to their motivation to unload the property quickly - even if it’s for less than the value of the property.

However, just as the above excerpt about short sales suggested, the real trick to investing in short sales is building great relationships and then in using those relationships to your advantage. By making an effort to get to know mortgage lenders in your area, you will find that you are able to work with them to get great deals on properties that interest you; likewise, when you know the real estate agents that they work with, you will find that you are able to get a jump on short sale availabilities - at least once in a while.

When you are able to build solid relationships and you are able to take advantage of them, you’ll find that it’s easy to succeed in short sale real estate investment.

When you’re looking into real estate investing as an opportunity to generate wealth, one thing that you may find yourself looking into involves short sales:

(source)Short sale investing involves buying a piece of property from a lender for an amount less than the balance owed on the property. Basically, there are two types of short sale realty investments. The first type refers to when you purchase a property, foreclosed by a lender listed with a realtor. In this type, you simply offer the lender, who has now become the owner on record, less than what is owed on the property. In this case, you can offer less than the balance that was due on the foreclosure. Such a short sale, realty investment calls for a good relationship with the realtor. The other type involves negotiating directly with the lender of a motivated seller. It is essential to be determined in the negotiation process, mainly in reaching the right person at the lender Real Estate Owned (REO) department and then to get the price of your choice.

Whether you are looking at short sales that involve buying from the lender or short sales that are negotiated with a real estate investment, there’s one thing that is an absolute must for a real estate investor: establishing relationships. When you are able to network and to get to know those people who can help you to grow your business, you will find that it is a lot easier to achieve the success that you are looking for.

While relationships are the most important component of short sales success, there are a few other key elements that you’ll want to focus on as well. First, there’s the research: you need to be sure that you are able to find properties with potential. Then there’s the ability to determine whether or not a particular short sale investment will help you to reach your goals.

Short sales can be great investments - a great opportunity to generate wealth with real estate. It’s all a matter of making sure you are looking at the big picture and are focused on moving forward.

Hi Michelle,
I absolutely admire what you are doing here for the ForeclosureMillionaireClub.com members with an unbelievable amount of patience and I want to use this extraordinary information source in this industry to it’s fullest extent.

I listened to your several sessions and I will continue to do it in any available time, but I also want your information to transfer into a productive activity.  Because I want to start to using immediately if I will find acceptable deal, However, .. I still have a question.

Q.  At what stage of Short Sale process can the investor, using an Option Contract, assign it to a buyer?

Thank you again for the opportunity to be here in the club.
Josef Schneider.

Josef,
Thank you SO MUCH for your feedback.  When I read emails like this it makes me want to do even more. 

Answers. 
You can do it an any time in the process, BUT, if we stick to our discussion that we had about using Options it would go like this:
1) You have a ready buyer in the wings
  a) You find the deal (the property)
  b) Get the docs completed with the seller: purchase & sale, option, etc.
  c) Negotiate your short sale (if you are doing a short sale)
  d) Set the closing date with the bank.
  e) Set the closing date with your buyer and explain your requirements for when he/she has to have the funds to your closing attorney
  f)  Assign the option on closing day.

OR

2) You have the deal (the property)
  a)  Get the docs completed with the seller: purchase & sale, option, etc
  b) You find your buyer
  c) Negotiate your short sale (if you are doing a short sale)
  d) Set the closing date with the bank.
  e) Set the closing date with your buyer and explain your requirements for when he/she has to have the funds to your closing attorney
  f)  Assign the option on closing day.

OR

3) You can assign the option prior to closing - assigning it to a buyer WHO WILL CLOSE and not leave the Seller hanging. Meaning they will come through.  AND if there is a short sale to be negotiated - that they will do it. 

If this is what you choose to do - you really need to be sure that you don’t assign it to someone who will “flake off”.  Even though they have given you $ for assigning the option to them, be sure about them, because if something, or all of it drops through the cracks - the seller is only going to remember your name.

Hope this helps!
Best,
Michelle
michelle@investorwealth.com
770-338-2797  10a-5p Eastern M-F

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As a real estate investor, one of the things that you will want to be sure that you are doing is following the market news. The more that there is talk of home owners arranging for short sales with the banks, the better the position you will be in to profit.

When banks agree to short sales with those who are about to go into foreclosure, effectively they agree to accept whatever the seller can receive for the home. Simply put, for investors, short sales offer you the chance to make your best offer on a property and, if it’s the best that the seller can get, you win.

If you are looking to see whether or not you can benefit from short sales, you will need to be sure that you are on top of the market in your area. You’ll want to keep an eye out so that the moment a short sale property comes on the market, you can jump.

It’s quick action that makes the difference for investors. Knowing the right time to pounce on a great deal is as essential as being able to quickly secure the financing that you need to close the sale. Of course, it also means paying attention to the right time to turn the property around - but that’s a story for another day.

The ‘buzz’ of investing in real estate always has some key ‘hot topics’ associated with the conversation:  ‘long term wealth’, ‘great cashflow’, ‘financial freedom’, and ‘cash in on the foreclosures of the mortgage meltdown’ just to name a few.

Then there is the reality about it all - - (1) Absolutely you can gain and secure long term wealth, (2) depending on how you evaluate the deals before you do them – you will get great cashflow, and (3) financial freedom is the ultimate goal, however, if you do not treat, and respect, the real estate investing business, AS A BUSINESS, what you will have is a job-like experience with that ultimate goal not getting any closer to you.

I really encourage you to listen to this teleconference I did with Charles Petty (the Audio MP3 Play Now link is at the end of this post here).  It will truly open your eyes to new possibilities and to the ‘business’ of making $10,000 or more in the next 30 days – and doing it consistently – and having time for your family, hobbies, AND vacations.

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Best regards, - Michelle  - -

 

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