Short Sale Process Questions

[Remi Oguntoye]

Hey Folks,

I am a new wholesaler with a lead on a condo in Lithonia, Georgia. I have a few questions for the group, but I will give a little background first.

The condo is in fair condition in an area that doesn't have too much activity. The rents range from 7-900/mo. There are no comps that have sold since November. Even still, none of the comps appear to have been fully renovated, as such, I can't get an accurate estimate of what the condo would be worth if sold to a buy and hold investor/end user. Closed condo sales prices, per the CRM I have range from $41.5k - $70.5k, with an average sales price of $51.8k. There were 11 properties included in the CMA that have sales dates ranging from April- November 2018.

There are two mortgages on the condo totaling about $74k. However, the condo is definitely underwater by around $30k. 

Interest rates are relatively low (3% on the first mortgage and 4% in the second mortgage). The condo has an estimated repair cost of $10-12k.

The owner is current on mortgage, however, she recently had some health issues pop up, which make her motivated. I would like to approach the lenders about a short sale opportunity, in light of her situation. My questions are as follows:

-The condo is located in Georgia, the lenders are located in Florida and Texas, and I live in New York. Are there any considerations that I should keep in mind with respect to this?

-What is the likelihood of getting the lenders to approve a short sale- considering she is current on mortgages?

-What conditions should I add to my standard purchase and sales contract to account for the variability as to whether the lender will or won't accept my short sale request?

-Is there a contract that I should use specific to short sales, instead?

-I am considering buying the condo in my IRA, as the cash flow on the condo would be strong, assuming I can get it at the price that it's worth to me. If the process takes 6 months, and I end up buying something else in my IRA in the meantime, can I change the buyer to another investor, or would that nullify the short sale agreement?

What pitfalls should I try to avoid, with respect to pursuing my first short sale transaction? Is there anything I should definitely consider?

Any advice you folks can offer will be greatly appreciated!

Best,

Remi