Newbie-Chicagoland Area

[Dana Dotson]

Hello Everyone,

I joined a few months back but never posted. I am a newbie in RE investing. I have been an PT Real Estate agent for the last 10 years and I know there has not been a better time to buy real estate. Different story on the selling.

However, I want to purchase short sells with the intent of selling them for a profit. I know of transitional funding and such and would be looking to close the deal anywhere from 0 to 30 days later.

My issue now is finding team members in the Chicagoland area (and also Charlotte, NC). I spoke to a few Attorneys and they seem to be afraid of short sale investors. Also, looking for a group of negotiators.

Any help would be appreciated and also advice.

Lastly, I am looking at moving to Charlotte, NC soon and would be looking at investing there as well.

Dana

[Sean Terry]

Hello Dana,

Congrats on getting started!! This business is awesome if you know what your doing.

I would recommend that you steer away, far away from short-sales for these reasons:

1. Takes waaaaay to long.
2. To much liability, just ask your fearful attorney.
3. The need for earnest money & transactional funding.
4. The laws are changing quick, very quick, it's a tough business model to build a business around.

I get tons of leads that I refer to the leading short-sale agent in my market and she just told me yesterday that the banks will be only taking investor offers on SS at 100% of BPO. They'll take owner occupied offers at 88% of BPO.
Banks are trying to squeeze out the investors.

So what's the alternative? Motivated Sellers...Here's the benefits:

1. All deals are off market, you're the only one that knows about them.
2. I never put earnest money down.
3. No need for transactional funding.
4. Very little competition.
5. Deeper spreads, more money
6. Less hoops to jump through.
7. Chances of being regulated...slim to none
8. Turn a deal in 2 weeks

Is that enough?

So how do you find these motivated sellers:

1. Bandit Signs in strategic locations in your city.
2. Direct mail, preferably the Yellow Letter to these lists
a. Absentee Investors
b. Inheritance
c. Probate
3. Internet marketing.

There is an endless supply of motivated sellers especially in Chicago.

What ever direction you wish to go, good luck and remember...
Never, Never Quit, Just Adapt and Overcome!

Cheers :)

Sean

[Eric M.]

Hello Dana,

You received quite a long, detailed welcome post for Sean there. Not really sure but sounds like he has something to sell you.
I guess I do too though, but hopefully it is to your benefit as well. I am a transactional lender in Chicago.

I guess my message is that part of what Sean says is true and part is not so true. Yeah SS can be a long pain in the butt. I stopped doing them myself and started funding them partly because of that reason. But that has more to do with my laziness than the fact that they don't work. SS flips do work and there are many here on BP doing them successfully.
No issues with "liability" if you do them correctly.
Earnest money is small potatoes and trans lending is honestly the best thing going. WHere else are lenders lending 100%?
Don't know what laws he thinks are changing quickly. If there is anything that doesn't change quickly, it is the law.
Lender negotiating tactics do change quickly and some are a PITA to deal with. Others ok. You will learn which is which. I have actually never heard of any lender requiring 100% bids for NOO but some certainly prefer OO.

Read through the posts and you will meet others doing SS flips and get alot of info here.

Attorneys are pretty clueless about SS flips but you don't need one. You do need a good title company who understands them. They are around, you just have to make some calls. You can try Security First Title to begin but there are others.
Good Luck
Eric

[Joe Dube]

Dana,

I have to agree with Sean. I tell new investors to start out wholesaling 10 deals first just to get to know the values and how to vercome objections from sellers, this will also help you to learn the types of marketing that works in your area. If you start out trying to do short sales first then it's going to take a while and you'll get discouraged.

Sean gave you some great advice on lists and direct mail marketing, use them and get a deal done.

Hope this helps...

[Jackie Patterson]

Welcome, Dana,

I have to disagree with Sean and Joe. We have completed, and are currently working, several short sales in the Chicago area. There are many attorneys and title companies that are investor friendly. You have to understand the process and be able to explain what you are doing. As far as banks only taking investor offers at 100% of BPO, I have not run across that, and we are doing them all over the country.

You might consider referring a few short sales to an investor group as a way of learning the business and making contacts, while gaining knowledge and experience. After you get your feet wet that way, you may be more comfortable jumping in by yourself. Let me know if I can help.

Jackie

[Dana Dotson]

Thank you everyone for your replies thus far. Just having gone through the short sale process as an agent, I am just convinced there is a better way of doing things and that investing in short sales is actually a service to the real estate market. I have had too many deals fall apart because the buyer couldn't wait on an approval, or the buyer wasn't willing to concede a few thousand dollars to meet the bank demands, and so on and so on. Getting a short sale approval actually adds a tremendous amount of value to a home. I know, I have had listings in which agents have called bank and cancelled the appointment once they found out it was a short sale.

That is my motivation. I know I can at least get the home to the position of being short sale approved with a bank price and be able to profit by selling a now clear title home to a willing buyer quickly.

Jackie, do you know of any investor friendly attorneys in the Chicagoland area that you can refer. I have gone through the process many times as a realtor with lots of fustration. However, I as an investor, could afford to wait until the deals could be achieved.

I know lots of people that have negative equity and are behind on payments and would love to sell their home short. Sure, I could take the listing, put it in the MLS, hope a realtor shows the home, put an offer on the home and watch them walk away because it takes 6 months.... OR, I could put an offer in on day 1, have a negotiator work the bank, make sure I meet the BPO agent, get the bank price and start to market the home at a price that it can sell to an end buyer in 30 - 60 days. Win-Win for all.

[Dana Dotson]

Also, in my market... A motivated seller is equal to a seller that is in a negative equity situation and behind on payments (I call those potential short sellers). I am not running across any other motivated sellers.

[Jackie Patterson]

Dana,

You are 100% correct in your view of a short sale and the value it adds to a home. In my opinion, everyone involved benefits......the seller, the buyer, the lender and the realtor. Give me a call when you get a chance.