Involved In Real Estate · Naples Florida · Member since 2008 · 54 posts · 11 votes
Last weekend I put out a load of bandit signs around the Vegas valley. I'm noticing the type of leads I'm getting has began to shift drastically. Many of the people I have spoke with through-out this week I cannot help by purchasing their home sub to, lease option, etc. I received three calls today. One lady has a 3000sq/ft 4 br 3 bath she paid $415k for in 2007 with LISTED comps at $389k. (Probably sell for $360ish) Another lady has 1300 sq/ft 3 br 2 bath that she paid $129k for in 2001 and through a series of 4, YES 4, cash out refinances her mortgage is $235 and she is approx $10 behind, finally a young couple that has a 2000 sq/ft 4br 3 bath with a pool wants to sell "subject to" but they paid $389 and comps are around $250. Zillow has an estimate of $259. It looks like I've avoided helping with short sales as long as I can. Anyone have any experience with negotiating these deals with the banks? Are certain banks more willing to make a deal than others? Any advice you are willing to share I would appreciate.
Minneapolis, MN · Member since 2008 · 691 posts · 12 votes
18y
Hello,
I hear you regarding the short sale oppportunities, That seems like the only prospets I'm getting in my area as well. Upside down sellers. If you read all the posts on the subject in this site under Short Slaes, you will learn more than you can possibly absorb. Then you will need to just dive in and try contacting a loss mitigator and go through the process.
Involved In Real Estate · Naples Florida · Member since 2008 · 54 posts · 11 votes
18y
Am I correct to assume I would tie up the property with a contract similar to any other transaction but have the offer contingent upon the bank accepting a short sale in the amount of $XXX,XXX? Then have the person sign a release allowing their bank to deal with me directly?
Minneapolis, MN · Member since 2008 · 691 posts · 12 votes
18y
There are actually a number of forms involved, and some would need to match the requirements of your particular state. I attached some SS forms which were provided by another Bigger Pockets poster previously. Have fun!
Involved In Real Estate · Naples Florida · Member since 2008 · 54 posts · 11 votes
18y
Thank you. Is there certain criteria that will increase my chances of seeing a short sale all the way through? Like hardships the banks are more likely to accept or something along those lines. I hate to waste weeks or months of my time working on a deal that just isn't going to happen.
Minneapolis, MN · Member since 2008 · 691 posts · 12 votes
18y
I went to a continuing ed class the other day, and of course it was full of real estate agents. The class was on foreclosures, and touched on short sales. I learned alot from talking to the agents, who are pulling their hair out in this market, but I guess they are also making lots of money. You might find an agent in town who specializes in SS, take them to lunch and pick their brain. If anyone is hesitant to waste their time, its a real estate agent. Good luck,
Sacramento, CA · Member since 2008 · 46 posts · 3 votes
18y
Short sales is definatley a good tool to have under your belt in a market like this! Dwan Bent Twyford has a good course on short sales and you could pick one up on ebay fairly cheap. She had said that you should have the seller write a hardship letter how they can't afford the payments and that they are planning on bankruptcy (more than likely right?) Also you could pull up old newspapers on crime that had happened in the area and maybe a list of pediphiles within a mile of the house. Make it seem like a house no one would like to buy and that they are lucky you are trying to negoitiate with them. If it has any mold problems, include pictures. :goofy:
Real Estate Consultant · Member since 2008 · 792 posts · 30 votes
18y
Vegas,
I am a loss mitigator (agent) and meet with about 5 home-owners every single day to try and help them get out of their situation. I can tell you that there is serious potential in buying short sales and making money.
However, getting the deal closed will almost definitely require that you close on the deal first.
Involved In Real Estate · Naples Florida · Member since 2008 · 54 posts · 11 votes
18y
I am simply a buy and hold kind of guy. I am mostly interested in rental properties that cash flow to hold long term. Right now I am testing out some marketing geared towards finding sub to deals but I'm getting nothing but phone calls with short sale leads. Closing is not an issue as long as I can sucessfully negotiate a deal with these lenders.
Real Estate Consultant · Member since 2008 · 792 posts · 30 votes
18y
Ok,
That is good to know. The key to short sales is persistence. Loss mitigation departments are completely overwhelmed. They routinely lose files. Different people in the same department will have a different version of the truth every time you talk to them.
It is hard to explain how disorganized the banks are, until you go through it a few times. Here is the basic process:
1. Find a short sale prospect
2. Make an offer to the bank (and signed by the seller)
3. Negotiate with the bank. You will also need to negotiate for the seller. The bank will require the seller to "qualify" for the short sale. Some items the bank will require from the seller are: hardship letter, pay stubs, bank statements, tax returns, financial worksheet, etc...Many times, it will behoove the investor to help the home owner complete their home-work
4. The bank will order a Broker Price Opinion (BPO). This is a critical step. Expert opinions vary, but most agree that banks normally accept offers within 80% of the BPO value.
***Here is the neat part. The person conducting the BPO is sometimes a real estate agent and sometimes an appraiser. Either way, valuing property is much more difficult to do now-a-days. MONEY IS MADE ON THE BPO. Getting the bank convinced that the property's value is eroding is critical.
5. The bank will either accept or counter your offer
6. Proceed accordingly.
Involved In Real Estate · Naples Florida · Member since 2008 · 54 posts · 11 votes
18y
Thanks Dave. I appreciate the info. I'm pretty familiar with the process I just have so many short sale leads I was curious how to figure out which ones to persue. Would you mind if I PM you if I come across any specific questions?
Contractor · Charlotte, NC · Member since 2008 · 178 posts · 14 votes
18y
i wouldn't pursue the deals that are upside over 100k unless the house is worth a million dollars. lenders won't discount enough to make it worth your time. you will only get deals at market value if you try.
Valencia, CA · Member since 2008 · 1 post · 0 votes
18y
Hey Vegas,
I too work with short sales and find that they can take months to get an approval. Typically banks move fast once they've have a set sale date on it. It just depends.
Some banks like Countrywide have changed up their way of handling short sales...although they are still one of my personal favorites to deal with.
Many banks require that the homeowner call them first before they will even consider processing a short sale. You want to "fyi" your sellers of this.
I also find other banks like Option One are not the best to deal with because they've moved their customer service center to India. The people are very ill informed there and sometimes very hard to understand. I've been bounced around for months with them only to find out that the paperwork I sent multiple times before has been there, etc...nightmare. I since learned that when I get their c.s. center I immediately ask to be transferred to someone in the States to help me...they have to do it...and since then my deals with them have gone smoother.
I encourage you to get your "feet wet" and try it out. There is good money to be made, but you need to realize that you will be on the phone holding sometimes in upwards of an hour before you get thru to some of these banks....now, if you don't want to do this (or can't) I know there are companies out there that help assist people in the day to day processing of a short sale. The company that I use personally is American Loss Mitigation Services. They really have there system down!
I wish you luck , Vegas, and if I can help you with any of your endeavors I would be happy to!
Lender · Huntington Beach, CA · Member since 2008 · 154 posts · 30 votes
18y
I reached the following recording at OCWEN the other day: "We will no longer accept calls from real estate agents." Why? Because REAs are a PITA! They defensively argue with the SS loss mit rep when the SS lender attempts a commission-ectomy instead of negotiating from a position of strength. So, as a loss mit rep at OCWEN said to me, "we don't want to even talk to REAs anymore."
Personally, I think REAs would be better off delegating the negotiating aspect of SS, even if it means they earn less commission.
Lender · Huntington Beach, CA · Member since 2008 · 154 posts · 30 votes
18y
I think they should hire assistants to do the job or hire a short sale negotiator like me for a percentage of their commission. They make less commission, yes, but they close more deals.
Chicago, IL · Member since 2014 · 4 posts · 1 vote
12y
I would not recommend Bill and Dawn Twyford (Investor's Edge University); I am surprised they haven't been arrested yet. These guys completely scammed me and many others. A simple google search will pull up numerous reports on ripoffreport.com , scam.com, and flippingfrenzy.com and more. They ripped me off of $10,000. They sold me advice (cds, "books", forms) that were out-of-date, laced with illegal techniques, and methods that just didn't work. They never followed up with their weekend coaching and refused to refund my money. You can see that they had a lawsuit against them in Florida for similar conduct but refused to pay. BECAREFUL of these guys, it is your hard earned money and if you follow their advice it could land you in jail.