Buying Pre-Foreclosures (Non Judicial) Foreclosures To Do Fix & Flips or Rentals

[Account Closed]

Pre-Foreclosures / Foreclosures fit into several groups and are done under each State's laws. It varies by State. 

Primarily there are Judicial & Non Judicial foreclosures. Out west and midwest are typically Non Judicial, that means they don't have to go to court to foreclose. East coast is typically Judicial, it involves the lender suing and going to curt to get the right to foreclose.

I like to say that Pre-Foreclosures are before the "Notice of Trustee" / "Notice of Sale" is recorded and 

Foreclosures are after a "Notice of Trustee" sale has been recorded and a sale date is set. 

"Recorded" means that paperwork has been filed and accepted at the County recorder's office. There will be several dates you want to track depending on the state you are buying these in.

These all involve different approaches and techniques to purchase the property. More on that later.

[Jay Hinrichs]

In my mind until they are lost they are all pre foreclosure..

when I chased these in earnest before the very strict  laws were put into place to make this activity very dicy we bought all of ours within 24 hours to 5 days of the actual sale at the steps.

that's were you got the good deals.. if your mailing or contacting them with just the notice of default your going to not do very well at all.. they are not properly motivated at that point and you will waste a ton of time and money chasing those deals

Along with most of these will have very little equity if any.. And again those are waste of time you dont want to buy these subto or any other way if there is not equity .. at least that was how we did it we want to step into the deal day one with equity so we had exits that did not include cutting a check if we needed to exit.

Now to be fair not many could do what we did.. Which was our own title search we never got title insurance we prepped our own deeds and got them signed and we recorded them ourselves this was how you got the smokin deals on subto and we beat all the other folks out because well frankly they did not know how to do it and did not have the risk capital or risk tolerance we did .. And having the cash ready to courier to the Trustee the day before the actual courthouse sale.. Talking the seller into actually signing .. giving them money to sign. etc etc.. this was/is a very intense way to try to acquire property at least the ones we did were we actually made money the day we closed.  We were just not looking to buy RE because the rate was lower than current market or the leverage was a little better that's a fools errand . 

[Jay Hinrichs]

YUP knowing the sequence is foreclosure rescue 101.

here it is at least how I did it. Now keep in mind I had already done my own title search and a date down so I knew the state of the title. 

1.Cashiers Check to Seller in exchange for the Notarized deed  You do this at a notary and the amount of the check is the sellers equity and what you negotiated.

2. U leave Notaries office and you drive straight to the county recorder and record it boom now you own it.

3. U have already been in touch with the Trustee and know the redemption amount

4. U either drive the cashiers check to the Trustee and redeem or you have a courier take it there.

in Practice when Northwest Trustee in Seattle was the big player we had a Courier drive it up and it helps to be on first name basis with the gals that work for the trustee like we were. Then we just put our own insurance on it . and continued to pay the insurance that was currently on it. U dont want a loss and the insurance check goes to who you bought it from and they wont give it to you.

Keep in mind there is a HUGE difference in subto foreclosure rescue and what you guys are charging for standard subto deals which are far easier to do and far less complicated then having to squeeze a deal into literally a 24 to 48 hour window.. its why we made the screaming deals virtually no competition because folks could not do their own title work or prep their own deeds and for sure was not going to risk 30k bringing a loan current like we did .. I mean something could go wrong and we could lose our money .. Although I don't think I recall it ever happening. What your teaching is just vanilla Subto very straight forward.. you guys and Mr. Pace :) although his students are going to get wacked no doubt hopefully your students wont.

[Jay Hinrichs]

Quote from @Account Closed:

Quote from @Jay Hinrichs:

YUP knowing the sequence is foreclosure rescue 101.

here it is at least how I did it. Now keep in mind I had already done my own title search and a date down so I knew the state of the title. 

1.Cashiers Check to Seller in exchange for the Notarized deed  You do this at a notary and the amount of the check is the sellers equity and what you negotiated.

2. U leave Notaries office and you drive straight to the county recorder and record it boom now you own it.

3. U have already been in touch with the Trustee and know the redemption amount

4. U either drive the cashiers check to the Trustee and redeem or you have a courier take it there.

in Practice when Northwest Trustee in Seattle was the big player we had a Courier drive it up and it helps to be on first name basis with the gals that work for the trustee like we were. Then we just put our own insurance on it . and continued to pay the insurance that was currently on it. U dont want a loss and the insurance check goes to who you bought it from and they wont give it to you.

Keep in mind there is a HUGE difference in subto foreclosure rescue and what you guys are charging for standard subto deals which are far easier to do and far less complicated then having to squeeze a deal into literally a 24 to 48 hour window.. its why we made the screaming deals virtually no competition because folks could not do their own title work or prep their own deeds and for sure was not going to risk 30k bringing a loan current like we did .. I mean something could go wrong and we could lose our money .. Although I don't think I recall it ever happening. What your teaching is just vanilla Subto very straight forward.. you guys and Mr. Pace :) although his students are going to get wacked no doubt hopefully your students wont.

Oddly, Mr. Pace just did a video on foreclosures (after I posted on it) and he failed to mention several steps that are critical to understanding the process. I don't think he was trying to deceive anyone on this, he just doesn't know. And of course, being the "guru" he makes the most dangerous assumptions that "guru"s have, they know it all. But, You don't know, what you don't know. ;-)

True story, I was dealing with Quality Loan Service as Trustee and negotiated a postponement and they wanted hard copy paperwork, wet ink, delivered to them. I think they meant their Corporate Office. But, I didn't want to take any chances, so I decided to drive to the office in Silverdale before the sale happened. It required a cashier's check as well.

I drove over from Seattle to Silverdale and it was a fake address on all of their Washington foreclosures. Well, the address was real but it was an empty office that hadn't seen a live person in a long time. They were using the mailing address to pretend they had physical presence as is required by the state. Nobody ever checked. Boy did the *** hit the fan when I reported that to the state. Saved and bought the property though.

"SEATTLE — Legal action taken by the Washington State Attorney General (AGO) against foreclosure trustee Quality Loan Service Corp. of Washington (QLS) has stopped unfair and deceptive business practices. QLS is one of the largest foreclosure trustees in Washington state."

"In addition, QLS already took action following the AGO’s initial court action to ensure homeowners can now gain access to its office in Seattle. QLS also sent a notice informing homeowners of its change of address."

Along with fines and other requirements.

I remember them mainly made checks out to them to bid at the courthouse cant remember if we ever did a foreclosure rescue with them.

[Don Konipol]

Quote from @Account Closed:

Pre-Foreclosures / Foreclosures fit into several groups and are done under each State's laws. It varies by State. 

Primarily there are Judicial & Non Judicial foreclosures. Out west and midwest are typically Non Judicial, that means they don't have to go to court to foreclose. East coast is typically Judicial, it involves the lender suing and going to curt to get the right to foreclose.

I like to say that Pre-Foreclosures are before the "Notice of Trustee" / "Notice of Sale" is recorded and 

Foreclosures are after a "Notice of Trustee" sale has been recorded and a sale date is set. 

"Recorded" means that paperwork has been filed and accepted at the County recorder's office. There will be several dates you want to track depending on the state you are buying these in.

These all involve different approaches and techniques to purchase the property. More on that later.

REALITY differs SO MUCH from the simple minded nonsense put out by these mentorship programs!  I’m going to take a weekend seminar on how to perform brain surgery.  The ad said they will provide you with all the tools you need and you can start performing surgery Monday morning! 

[Jay Hinrichs]

Quote from @Don Konipol:

Quote from @Account Closed:

Pre-Foreclosures / Foreclosures fit into several groups and are done under each State's laws. It varies by State. 

Primarily there are Judicial & Non Judicial foreclosures. Out west and midwest are typically Non Judicial, that means they don't have to go to court to foreclose. East coast is typically Judicial, it involves the lender suing and going to curt to get the right to foreclose.

I like to say that Pre-Foreclosures are before the "Notice of Trustee" / "Notice of Sale" is recorded and 

Foreclosures are after a "Notice of Trustee" sale has been recorded and a sale date is set. 

"Recorded" means that paperwork has been filed and accepted at the County recorder's office. There will be several dates you want to track depending on the state you are buying these in.

These all involve different approaches and techniques to purchase the property. More on that later.

REALITY differs SO MUCH from the simple minded nonsense put out by these mentorship programs!  I’m going to take a weekend seminar on how to perform brain surgery.  The ad said they will provide you with all the tools you need and you can start performing surgery Monday morning! 

This is a good point Don Especially when it comes to foreclosures and subto and other transactions that are not vanilla.. Frankly it takes years to get this stuff down and no one knows it all not even lawyers :).  The risk profile of these transactions if they were honestly divulged you would have very few people participating and for sure paying money to get taught how to do the very basics.
Along with the laws are very state specific so no mentor program is going to know it all in a bunch of states and for sure nationwide.. I can see it if one wants to mentor in One state or like for us Oregon and Washington who had very similar laws.  Alot of these states you have to be a licensed foreclosure consultant to even talk to folks in default.. And then the states are unclear who is qualified.. Generally its an attorney  and MLO  and a RE Broker every one else is not. Also on Foreclosure rescue if folks in the Northwest new they had to give up to 80% of their gain back to the person you bought it from if you sell it in a few years.. How many people are going to go for that ?
so on and so forth.. So its sell the sizzle do the Amway you deserve to be financially independent of course you want to do this so you can spend more time with the kids  U know the elevator pitch. And for sure tug at the heart strings.  These techniques exist however REAL education takes a lot of time and the deals dont just grow on trees.. So many simply tire of trying to find the unicorn deal all the while the  Nice " man in the Blue Suit has gotten rich on your dreams" One of my favorite lines from Stevie Winwood and the Low Spark of the HIgh heels boys. YET so apropos for anything guru or paid training in the real estate space or for that matter option trading or forex or whatever.

Having been a back room vendor to a lot of these companies I saw it first hand.. My deals were straight forward you want to buy that rental I will finance a portion :) in your IRA no less

[Jay Hinrichs]

Quote from @Account Closed:

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

Quote from @Account Closed:

Pre-Foreclosures / Foreclosures fit into several groups and are done under each State's laws. It varies by State. 

Primarily there are Judicial & Non Judicial foreclosures. Out west and midwest are typically Non Judicial, that means they don't have to go to court to foreclose. East coast is typically Judicial, it involves the lender suing and going to curt to get the right to foreclose.

I like to say that Pre-Foreclosures are before the "Notice of Trustee" / "Notice of Sale" is recorded and 

Foreclosures are after a "Notice of Trustee" sale has been recorded and a sale date is set. 

"Recorded" means that paperwork has been filed and accepted at the County recorder's office. There will be several dates you want to track depending on the state you are buying these in.

These all involve different approaches and techniques to purchase the property. More on that later.

REALITY differs SO MUCH from the simple minded nonsense put out by these mentorship programs!  I’m going to take a weekend seminar on how to perform brain surgery.  The ad said they will provide you with all the tools you need and you can start performing surgery Monday morning! 

This is a good point Don Especially when it comes to foreclosures and subto and other transactions that are not vanilla.. Frankly it takes years to get this stuff down and no one knows it all not even lawyers :).  The risk profile of these transactions if they were honestly divulged you would have very few people participating and for sure paying money to get taught how to do the very basics.
Along with the laws are very state specific so no mentor program is going to know it all in a bunch of states and for sure nationwide.. I can see it if one wants to mentor in One state or like for us Oregon and Washington who had very similar laws.  

Exactly @Jay Hinrichs: Investors should learn what not to do as much as they should learn how to do things properly.

Pre-Foreclosures on the left coast are something I don't even touch. I won't teach on it either.

In court they ask "where did you learn to do this, where did you get the paperwork, who else is doing this" and "Give us copies of everything you have ever done, including all marketing". So, on the left coast, anyone associated with anyone doing pre-foreclosures gets a nasty phone call to come and visit some very unfriendly people in high places. They are not your friends. ;-)

There are plenty of better opportunities to chase pre-foreclosures elsewhere and there eventually will be a lot more, in better places. There really aren't that many pre-foreclosures comparatively speaking right now. 

Joe Kaiser

[David Randolph]

Quote from @Account Closed:

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

Quote from @Account Closed:

Pre-Foreclosures / Foreclosures fit into several groups and are done under each State's laws. It varies by State. 

Primarily there are Judicial & Non Judicial foreclosures. Out west and midwest are typically Non Judicial, that means they don't have to go to court to foreclose. East coast is typically Judicial, it involves the lender suing and going to curt to get the right to foreclose.

I like to say that Pre-Foreclosures are before the "Notice of Trustee" / "Notice of Sale" is recorded and 

Foreclosures are after a "Notice of Trustee" sale has been recorded and a sale date is set. 

"Recorded" means that paperwork has been filed and accepted at the County recorder's office. There will be several dates you want to track depending on the state you are buying these in.

These all involve different approaches and techniques to purchase the property. More on that later.

REALITY differs SO MUCH from the simple minded nonsense put out by these mentorship programs!  I’m going to take a weekend seminar on how to perform brain surgery.  The ad said they will provide you with all the tools you need and you can start performing surgery Monday morning! 

This is a good point Don Especially when it comes to foreclosures and subto and other transactions that are not vanilla.. Frankly it takes years to get this stuff down and no one knows it all not even lawyers :).  The risk profile of these transactions if they were honestly divulged you would have very few people participating and for sure paying money to get taught how to do the very basics.
Along with the laws are very state specific so no mentor program is going to know it all in a bunch of states and for sure nationwide.. I can see it if one wants to mentor in One state or like for us Oregon and Washington who had very similar laws.  

Exactly @Jay Hinrichs: Investors should learn what not to do as much as they should learn how to do things properly.

Pre-Foreclosures on the left coast are something I don't even touch. I won't teach on it either.

In court they ask "where did you learn to do this, where did you get the paperwork, who else is doing this" and "Give us copies of everything you have ever done, including all marketing". So, on the left coast, anyone associated with anyone doing pre-foreclosures gets a nasty phone call to come and visit some very unfriendly people in high places. They are not your friends. ;-)

There are plenty of better opportunities to chase pre-foreclosures elsewhere and there eventually will be a lot more, in better places. There really aren't that many pre-foreclosures comparatively speaking right now. 

 @Account Closed Your last statement:

"There really aren't that many pre-foreclosures comparatively speaking right now."

Yes,it seems due to the Cares act and moratorium that ended 7/2021 we are only back up to about 78% of the number of monthly foreclosures of about 35K a month but yet there are over 2 million delinquent loans currently because they are not actively foreclosing. Hmmm that is nearly 5 years backlog if NO new homeowners miss any payments.

But in real estate investing, Short Sales only need "1 house payment" missed. So FOR ME over the past 14 years I only needed about 1 per month to have over $3M cash in my retirement accounts.

My point to MY opinion is Short sales are still a valid real estate strategy to consider now.

[David Randolph]

Quote from @Account Closed:

Quote from @David Randolph:

Quote from @Account Closed:

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

Quote from @Account Closed:

Pre-Foreclosures / Foreclosures fit into several groups and are done under each State's laws. It varies by State. 

Primarily there are Judicial & Non Judicial foreclosures. Out west and midwest are typically Non Judicial, that means they don't have to go to court to foreclose. East coast is typically Judicial, it involves the lender suing and going to curt to get the right to foreclose.

I like to say that Pre-Foreclosures are before the "Notice of Trustee" / "Notice of Sale" is recorded and 

Foreclosures are after a "Notice of Trustee" sale has been recorded and a sale date is set. 

"Recorded" means that paperwork has been filed and accepted at the County recorder's office. There will be several dates you want to track depending on the state you are buying these in.

These all involve different approaches and techniques to purchase the property. More on that later.

REALITY differs SO MUCH from the simple minded nonsense put out by these mentorship programs!  I’m going to take a weekend seminar on how to perform brain surgery.  The ad said they will provide you with all the tools you need and you can start performing surgery Monday morning! 

This is a good point Don Especially when it comes to foreclosures and subto and other transactions that are not vanilla.. Frankly it takes years to get this stuff down and no one knows it all not even lawyers :).  The risk profile of these transactions if they were honestly divulged you would have very few people participating and for sure paying money to get taught how to do the very basics.
Along with the laws are very state specific so no mentor program is going to know it all in a bunch of states and for sure nationwide.. I can see it if one wants to mentor in One state or like for us Oregon and Washington who had very similar laws.  

Exactly @Jay Hinrichs: Investors should learn what not to do as much as they should learn how to do things properly.

Pre-Foreclosures on the left coast are something I don't even touch. I won't teach on it either.

In court they ask "where did you learn to do this, where did you get the paperwork, who else is doing this" and "Give us copies of everything you have ever done, including all marketing". So, on the left coast, anyone associated with anyone doing pre-foreclosures gets a nasty phone call to come and visit some very unfriendly people in high places. They are not your friends. ;-)

There are plenty of better opportunities to chase pre-foreclosures elsewhere and there eventually will be a lot more, in better places. There really aren't that many pre-foreclosures comparatively speaking right now. 

 @Account Closed Your last statement:

"There really aren't that many pre-foreclosures comparatively speaking right now."

Yes,it seems due to the Cares act and moratorium that ended 7/2021 we are only back up to about 78% of the number of monthly foreclosures of about 35K a month but yet there are over 2 million delinquent loans currently because they are not actively foreclosing. Hmmm that is nearly 5 years backlog if NO new homeowners miss any payments.

But in real estate investing, Short Sales only need "1 house payment" missed. So FOR ME over the past 14 years I only needed about 1 per month to have over $3M cash in my retirement accounts.

My point to MY opinion is Short sales are still a valid real estate strategy to consider now.

@David Randolph: I think of "short sales"

as being "buying a property for less than the amount owing, with the agreement from the lender and the seller."

"The seller is not allowed to profit from the sale."

The property can not be refinanced for greater than the amount purchased for at least 6 months

Are we using the same definition or do you have another one or some other variation?

Ken, pretty close to it except in full disclosure, I am not a Lawyer, accountant, Realtor, Broker or even an Actor. I am a real estate investor that buys distressed property, NOT houses on the MLS retail. Although in 14 years I have never seen or signed a Arms Length affidavit requiring no refinance within 6 months. There are some FNMA 90 Days deed restrictions. I have rehabbed many short sales and never had a problem getting a refinanced loan and certainly have sold most to a retail buyer within 6 months at a HUGE profit. They have never had a problem buying it with a new retail lender.

I would say the seller not profit is correct but the lender will usually pay them a $1500-$3000 Seller Incentive on the HUD.

I like your definition of: 

"buying a property for less than the amount owing"

Most investors MISTAKENLY say that a short sale is selling/buying a house: 

"when the loan is more than the house is worth" 

[Jay Hinrichs]

Quote from @Account Closed:

Quote from @Jay Hinrichs:

Quote from @Account Closed:

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

Quote from @Account Closed:

Pre-Foreclosures / Foreclosures fit into several groups and are done under each State's laws. It varies by State. 

Primarily there are Judicial & Non Judicial foreclosures. Out west and midwest are typically Non Judicial, that means they don't have to go to court to foreclose. East coast is typically Judicial, it involves the lender suing and going to curt to get the right to foreclose.

I like to say that Pre-Foreclosures are before the "Notice of Trustee" / "Notice of Sale" is recorded and 

Foreclosures are after a "Notice of Trustee" sale has been recorded and a sale date is set. 

"Recorded" means that paperwork has been filed and accepted at the County recorder's office. There will be several dates you want to track depending on the state you are buying these in.

These all involve different approaches and techniques to purchase the property. More on that later.

REALITY differs SO MUCH from the simple minded nonsense put out by these mentorship programs!  I’m going to take a weekend seminar on how to perform brain surgery.  The ad said they will provide you with all the tools you need and you can start performing surgery Monday morning! 

This is a good point Don Especially when it comes to foreclosures and subto and other transactions that are not vanilla.. Frankly it takes years to get this stuff down and no one knows it all not even lawyers :).  The risk profile of these transactions if they were honestly divulged you would have very few people participating and for sure paying money to get taught how to do the very basics.
Along with the laws are very state specific so no mentor program is going to know it all in a bunch of states and for sure nationwide.. I can see it if one wants to mentor in One state or like for us Oregon and Washington who had very similar laws.  

Exactly @Jay Hinrichs: Investors should learn what not to do as much as they should learn how to do things properly.

Pre-Foreclosures on the left coast are something I don't even touch. I won't teach on it either.

In court they ask "where did you learn to do this, where did you get the paperwork, who else is doing this" and "Give us copies of everything you have ever done, including all marketing". So, on the left coast, anyone associated with anyone doing pre-foreclosures gets a nasty phone call to come and visit some very unfriendly people in high places. They are not your friends. ;-)

There are plenty of better opportunities to chase pre-foreclosures elsewhere and there eventually will be a lot more, in better places. There really aren't that many pre-foreclosures comparatively speaking right now. 

Joe Kaiser

Joe Kaiser
Now that one goes back quite a ways. You've got a good memory.

"On March 21, 2011, the case of State v. Kaiser LLC (Joseph Kaiser and his wife, Heidi) was decided before the court of Appeals of Washington, Division 1."

and then there was Michael Mastro
Commercial Real Estate

• he listed assets in excess of $249 million and liabilities of over $586 million in a filing with the U.S. Bankruptcy Court for the Western District of Washington.
  
• 10 years in, Mastro bankruptcy case may finally be in 'home stretch'
• The largest personal bankruptcy in state history drags on
• On the trail of Michael Mastro: how to flee the law when you are 87
• 
  Following that first night spent in the police station, the Mastros were transported 90 miles to a prison in Lyon France

Mastros made American Greed episode !

[David Randolph]

Quote from @Account Closed:

Quote from @David Randolph:

Quote from @Account Closed:

Quote from @David Randolph:

Quote from @Account Closed:

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

Quote from @Account Closed:

Pre-Foreclosures / Foreclosures fit into several groups and are done under each State's laws. It varies by State. 

Primarily there are Judicial & Non Judicial foreclosures. Out west and midwest are typically Non Judicial, that means they don't have to go to court to foreclose. East coast is typically Judicial, it involves the lender suing and going to curt to get the right to foreclose.

I like to say that Pre-Foreclosures are before the "Notice of Trustee" / "Notice of Sale" is recorded and 

Foreclosures are after a "Notice of Trustee" sale has been recorded and a sale date is set. 

"Recorded" means that paperwork has been filed and accepted at the County recorder's office. There will be several dates you want to track depending on the state you are buying these in.

These all involve different approaches and techniques to purchase the property. More on that later.

REALITY differs SO MUCH from the simple minded nonsense put out by these mentorship programs!  I’m going to take a weekend seminar on how to perform brain surgery.  The ad said they will provide you with all the tools you need and you can start performing surgery Monday morning! 

This is a good point Don Especially when it comes to foreclosures and subto and other transactions that are not vanilla.. Frankly it takes years to get this stuff down and no one knows it all not even lawyers :).  The risk profile of these transactions if they were honestly divulged you would have very few people participating and for sure paying money to get taught how to do the very basics.
Along with the laws are very state specific so no mentor program is going to know it all in a bunch of states and for sure nationwide.. I can see it if one wants to mentor in One state or like for us Oregon and Washington who had very similar laws.  

Exactly @Jay Hinrichs: Investors should learn what not to do as much as they should learn how to do things properly.

Pre-Foreclosures on the left coast are something I don't even touch. I won't teach on it either.

In court they ask "where did you learn to do this, where did you get the paperwork, who else is doing this" and "Give us copies of everything you have ever done, including all marketing". So, on the left coast, anyone associated with anyone doing pre-foreclosures gets a nasty phone call to come and visit some very unfriendly people in high places. They are not your friends. ;-)

There are plenty of better opportunities to chase pre-foreclosures elsewhere and there eventually will be a lot more, in better places. There really aren't that many pre-foreclosures comparatively speaking right now. 

 @Account Closed Your last statement:

"There really aren't that many pre-foreclosures comparatively speaking right now."

Yes,it seems due to the Cares act and moratorium that ended 7/2021 we are only back up to about 78% of the number of monthly foreclosures of about 35K a month but yet there are over 2 million delinquent loans currently because they are not actively foreclosing. Hmmm that is nearly 5 years backlog if NO new homeowners miss any payments.

But in real estate investing, Short Sales only need "1 house payment" missed. So FOR ME over the past 14 years I only needed about 1 per month to have over $3M cash in my retirement accounts.

My point to MY opinion is Short sales are still a valid real estate strategy to consider now.

@David Randolph: I think of "short sales"

as being "buying a property for less than the amount owing, with the agreement from the lender and the seller."

"The seller is not allowed to profit from the sale."

The property can not be refinanced for greater than the amount purchased for at least 6 months

Are we using the same definition or do you have another one or some other variation?

Ken, pretty close to it except in full disclosure, I am not a Lawyer, accountant, Realtor, Broker or even an Actor. I am a real estate investor that buys distressed property, NOT houses on the MLS retail. Although in 14 years I have never seen or signed a Arms Length affidavit requiring no refinance within 6 months. There are some FNMA 90 Days deed restrictions. I have rehabbed many short sales and never had a problem getting a refinanced loan and certainly have sold most to a retail buyer within 6 months at a HUGE profit. They have never had a problem buying it with a new retail lender.

I would say the seller not profit is correct but the lender will usually pay them a $1500-$3000 Seller Incentive on the HUD.

I like your definition of: 

"buying a property for less than the amount owing"

Most investors MISTAKENLY say that a short sale is selling/buying a house: 

"when the loan is more than the house is worth" 

I've bought a couple of short sales, but it's been quite a while. I was just curious if anything has changed, not much it seems. ;-) I didn't know there could be a seller incentive. Good info. 

 Actually alot has changed. 

1 the rules are very well regulated now vs 2009 -2012 when it was the wild cowboy days and banks were screwing families all over the place (which is why my wife and I started doing short sales - help families out).

2. The banks are dumping houses because they have to many for too long, to high number of days of missed payments, way higher than the great recession. Last month my group member made $132K profit on a $280K house that he sold , his first short sale