Atlanta, GA · Member since 2020 · 5 posts · 2 votes
Who all is actively getting properties/profits from *facilitating* short sales between owners in default and banks? At a recent REIA meeting, an investor from Florida presented some impressive numbers for this strategy. It's often a double close -- negotiate a big discount short sale with the bank, and then either keep the property or sell it to another investor (could be considered a sub-type of wholesaling).
However, since the REIA meeting, I've also read a lot of discussions online about banks trying to prevent this more in the past 10 years. Additionally, there is a lot of differences in legislation and bank practices across states, so I'm hoping to confirm any pros and cons to this strategy. Bonus points if the pros and cons are specific to Georgia.
Thanks in advance!
P.S. for information purposes, I am also not a realtor or attorney of any kind.
Investor · Los Angeles, CA · Member since 2012 · 1k+ posts · 500 votes
6y
You're not supposed to double close as most short sales have deed restrictions for at least 30 days. I personally love buying short sales, but I don't double close or wholesale contracts on them.
Attorney · Northbrook, IL · Member since 2017 · 719 posts · 549 votes
6y
@Anthony Agnone It can be a great strategy if you plan to rehab properties or can at least hold them for 90 days. If not, I would tread very carefully. I've negotiated more short sales than I count and when you get the short sale approval, they will give you the terms. Those terms can include putting a restriction on the face of the deed that you cannot resell the property for 30, 60, or 90 days. They may also require all parties to sign an affidavit that there are no other contracts or agreements pertaining to the property. Trying to wholesale a short sale is like trying to force the square peg in the round hole. The process is already hard enough, don't try to add another layer.