Good reason to do a short sale after filing Bankruptcy.. anyone?

[Steve Norton]

Hey folks here is a question for you!

Can you think of one REALLY GOOD reason why the home owner would want to sell the property via short sale after filing BK? I will have to convince the home owner's bk attorney to get the sale approved with the bankruptcy court if I want to move forward with this short sale. Otherwise he will suggest against it and the home owner will listen.
The home owner has abandoned the property and it is vacant ready to be foreclosed or hopefully short sold.

Thanks again!

[Scott Hubbard]

Originally posted by Steve Norton:

Hey folks here is a question for you!

Can you think of one REALLY GOOD reason why the home owner would want to sell the property via short sale after filing BK? I will have to convince the home owner's bk attorney to get the sale approved with the bankruptcy court if I want to move forward with this short sale. Otherwise he will suggest against it and the home owner will listen.
The home owner has abandoned the property and it is vacant ready to be foreclosed or hopefully short sold.

Thanks again!

Foreclosure on their record will negatively affect the their credit. On loan applications, there is a question posed " Have you ever been foreclosed upon? A yes answer could mean they will not get an A paper loan. This sould cost them thousands of dollars.

If I were you, wait till the dust settles. These usually do not turn out well.

[James Ward]

Here is my advice.

To many deals out there to get involved with the complicated stuff. Bankruptcy is one of the most difficult. Unless you have lots of expierence, stay away. Find another deal.

[Steve Norton]

Foreclosure on their record will negatively affect the their credit. On loan applications, there is a question posed " Have you ever been foreclosed upon? A yes answer could mean they will not get an A paper loan. This sould cost them thousands of dollars.

If I were you, wait till the dust settles. These usually do not turn out well.

Thank you. so you are saying that even after they ruin their credit with a bankruptcy, that avoiding the foreclosure will have a positive effect on their credit ?
I am trying to overcome the argument of "I don't care anymore since I filed bankruptcy and my credit is already ruined, so why bother with the short sale"
Thoughts?

[Scott Hubbard]

To answer your question, yes having foreclosure would further impact their credit negatively.

But, even if the homeowner is convinced to stay in the game, BK removes nearly possibilites for a positive outcome for you as an investor.

You will no longer control the transaction and that is a recipe for disaster.

Crosswind and myself are giving you friendly advice, let the chips fall where they may. Get out of the deal, keep tabs on them to see how they are doing, and if they still have the property after the discharge, then you can try it again.

[Steve Babiak]

Originally posted by Scott Hubbard:

... Get out of the deal, keep tabs on them to see how they are doing, and if they still have the property after the discharge, then you can try it again.

The opportunity becomes even better if the bankruptcy becomes dismissed because then they are almost certain to lose the house with that; the challenge in that case becomes deferring the actual foreclosure enough to complete your short.

[Jason Wheeler]

In some cases you can "buy" the equity from the owner. This way instead of walking away empty handed and with a foreclosure, they can leave with some capital to start over. You have to think win win.

[Steve Babiak]

Originally posted by Jason Wheeler:

In some cases you can "buy" the equity from the owner. ...

Jason,

The OP was discussing doing a short sale - where there is no equity. So how - and why - would one go about "buying" that non-existent equity?