Short Sale Questions

[Amaf J.]

Evening everyone,

I was doing some research and it seems like short-sales might be a good avenue to pursue in order to get homes at a discounted rate. I did have some questions though about the process and post-purchase. I'm mainly looking to focus on purchasing, light rehab if needed and renting to tenants. 

1) Do most short sales require any form of rehab work?

2) Typically, how much cheaper are they compared to houses on the MLS?

3) What percentage do you typically offer on asking price?

4) Are these good purchases for buy and hold?

5) How do you guys typically pull comps on houses in the area?

6) Are there certain things that stand out for you to automatically dismiss as potential purchase?

7) Do you only use HomePath or other sites too?

8) Is the analysis on the property done the same way as other properties?

Thank you all!

[Matt Motil]

short sales are just like anything else. They can be on the market listing found on the MLS or on other sites where people post property for sale. You can also find people underwater that will use short sales but their homes are not yet on the market.

As for rehabs, it's all over the place. You can find people in bad financial situations that want to short sale but have lived in the same home for years and taken great care of it. You can also find people who have tried to work with their lenders to restructure and been turned down that then pursue short sale and pour concrete down the drains before they move out. 

Regardless of whichever strategy you find a seller trying to use to sell their home, at the end of the day your max purchase price as the investor will always be the same: the most you can pay = ARV - rehab costs - holding costs - closing costs - profits - cost of lending.