Short Sale..what does it mean to a wholesaler?

[Ron Cole]

Hello all I'm the new kid on the block with something that's on my mind and I wanted to share it with you all.

I was looking on line for deals and I came across a property that's going for $75,000. I've checked comps and it's around 200,000. and up.  Wow, great deal right?  Only thing is its a short sale, can you do a wholesale deal on a short sale?

[Bill Gulley]

Originally posted by @Ron Cole:

Originally posted by @Kyle J.:

Welcome to the site Ron.

Short sales don't usually make good wholesales because the bank won't allow the purchase contract to be assigned.  The bank is already being shorted on what they are owed by the homeowner, so they certainly aren't going to want to see someone else (like a wholesaler) making a profit in the way of an assignment fee. 

If this property is that good of a deal though, you could always close on it yourself and then re-sell it.

Best of luck to you.

 Thanks Kyle J for taking the time to inform me of this.  I'm assuming that pre-foreclosures are in the same boat as well.

Actually, pre-foreclosures are in more dangerous waters, a short sale the bank just won't go there, screwing around with a foreclosure takes on a blend of federal compliance and consumer issues, cause a delay and you can get nailed. Foreclosures are not a beginner strategy and the equity they may have is irrelevant, you generally need to close on these quickly. 

Most wholesalers plant seeds of deceit in a seller's mind, doing that in a foreclosure can bite you very hard, my advice, don't mess with foreclosures, auctions, short sales or listed properties. Stick to distressed properties and owners off the market. :)