Short Sale Flips and Transactional Funding

[Vito P.]

Hi All,

I am new to this forum and somewhat new to investing in distressed properties, although not new to real estate investing in general. I am a builder and developer, so I have bought, developed, built, and sold quite a few properties over the last 12 years.

I am interested in learning about flipping short sales using transactional funding. I think I have a pretty decent understanding of the process and believe I have the skills to be successful at it. I have negotiated two short sales in the past, and was able to get both approved. This was not done for a profit, but rather just to help someone who had to short sell their property and their realtor was not getting it done for them.

I am very intrigued by short sale flips because I believe, at least in theory, they present a good opportunity that should only get better in the forseeable future.

Enough about me - I have a few questions:

1. I have not met anyone who is flipping short sales and in fact when the topic was discussed last month at our local REI meeting, it was almost taboo and was strongly discouraged because of potential fraud issues. From what I have read, full disclsosure will avoid this (I intend to seek advice from my attorney on this). So my question is how many people are successfully finding and flipping short sales to a retail buyer using transactional funding on a regular basis? How many deals of this nature are are the full time investors completing per month?

2. What are the average spreads that are able to be obtained, either on a dollar or percentage basis. Is it enough to justify the additional work that is involved as opposed to dealing in properties that have equity.

3. What are the best types of properties to target - properties that are at, below, or above the average market price. I would think higher priced properties may generate more of a spread, but would also be harder to sell.

4. What are the best strategies for marketing for end buyers and at what point do you start marketing in relation to when you have the property under agreement? I understand that you should always be marketing for buyers, but when do you start marketing the specific property - as soon as you put it under agreement or after the short sale is approved?

I have a bunch more questions, but I'll save those for another post. I look forward to hearing from as many of you as possible.

Thank you.