All Forum Posts by: Denise Evans

You have to go with your market and what is prevailing there. You should always run a credit check for anyone signing the lease, and a general background check for any adults who will be occupying the premises.  Married or couples or anything else is irrelevant.

A word of caution regarding background checks. Are you aware of new HUD rules regarding Fair Housing and criminal background information?

A bond earning 9.9% interest is a high risk loan. Otherwise, the borrower would buy cheaper money elsewhere, if it could.  If it is paying 9.9%, you have to ask yourself, "Why?" Even if it were a really old bond when rates were high, with current interest rates in recent years, the borrower could have afforded to refinance and pay the defeasance (prepayment) and still come out more cheaply.

For most people, a short sale is not a DIY.  But, if you 

• are detail oriented and able to follow instructions to the letter; and
• educate yourself about little tricks like "who is the borrower, exactly" and acceptable hardship reasons, and things like the borrower can have up to 3  months of living expenses in bank accounts and not be asked to bring it to closing, and 2nd lien holders will almost always release their liens for the token $3,000 the first lienholder will let them have at closing, etc. and
• keep in mind the bank's goal is to avoid the  uncertainty of a foreclosure but still make approximately the same money as they would with a foreclosure (after deducting foreclosure and holding expenses and discounting to present value)

then you can do your own short sales. 

Here is a tip about acceptable hardship reasons: They are usually listed on the short sale paperwork instructions. There will be a box to check for things like "divorce" or "excessive credit card debt," etc. If you have to check "other" then it will be harder to get the short sale approved because "other" requires analysis by someone. But, even the instructions will tell you acceptable "other" reasons. One acceptable "other" is "property or borrower's employer located in federal declared disaster area." If that was your hardship, because it trickled into all sorts of economic fallout that caused hardship, you just check the box that says "other" but copy the exact language from the instructions regarding federal disaster areas, attach copies of the disaster declarations, and you are good to go.

Declining rental income because of declining real estate prices is almost never an acceptable hardship. Makes no sense to me, but that's the way it is.  BUT, if you can say that your business is renting properties, and you have a business failure, that IS acceptable. Crazy, isn't it? It's all about boxes being checked on computers and the right answer spitting out at the end of the algorithm.

Finally, in my experience, most real estate agents do not know how to do short sales property. Sure, many of them know generally how to do them, and a certain number of properties that come in the funnel at the top will flow out into approved short sales, but not all of them.

Every single short sale I did was approved, with two exceptions.  A borrower who committed fraud on his financials and got caught and a borrower who had millions of dollars in liquid assets but wanted to roll the dice to see if he would be approved, even though I told him it was highly unlikely.  That type of success ratio requires a lot of attention to each and every short sale. A real estate agent can usually not afford that time commitment. I was different, because I was getting legal fees for high end properties, so my short sales got LOTS of attention. You will be different, because you will be committed to getting your particular short sale approved. It does truly makes a difference.

@Christian Bors, most lenders require a copy of the MLS listing as part of the short sale package. Some do not. It is specific to investor (the entity that actually owns the loan, as opposed to the servicer) and to insurer (such as FHA-insured loans or PMI-insured loans). The best thing to do is to get the authorization letter, and use it to obtain the list of requirements for a short sale. If they need a copy of the MLS listing, then list it with somebody.

In my experience, banks generally accept offers in the range of 15% to 20% less than fair market value, as determined by the appraisal they order. It is important to be present when the appraiser inspects the property, so you can point out all property defects and obsolescence that will affect value. You should also present the appraiser with at least 6 comparable recent sales and 6 current competing properties on the market, with explanations regarding how the subject property is similar to, or differs from, those properties.  Banks use appraisal management companies for appraisals, which means an average cost of $75 and a turnaround time of 3-5 business days. That's a lot of pressure on an inexperienced appraiser (who else will work for $75?) so any resources you can provide will probably be assimilated into the final appraisal. The fact that you are a real estate agent makes no difference except for payment of a real estate commission. Some will allow you to be paid all or part of the commission at closing. Most will not. You might want to get a friend to be the listing agent.  Some banks require an anit-flipping affidavit saying you will not flip within 90 days. Most do not. Most simply require an arms length affidavit.  I would not be afraid to sign a purchase contract for $200,000 and see if you can get it there. Earnest money can be as low as $500. The seller usually doesn't care at this point, and the bank has no dog in that fight. Do not trust the seller to fill out short sale paperwork properly. Get an authorization letter and YOU fill it out and then get his signature. Many short sales fail because of incomplete or inaccurate paperwork, not the numbers.  If the owner is H&W but only H signed the note, only H assets and income go on the forms. But, complete family living expenses go on there, not just half.  Good luck!

Sorry, I had company at the door and had to cut my prior reply short. Have you talked to the neighbors? What do they know about the decedent and any possible relatives?  Is the mail being forwarded some place else? Was there an obituary notice? Did it list surviving relatives or pallbearers? Was there a spouse at one time?  Predeceased or divorced?  If divorced, can that person provide any info?    What doctor signed the death certificate? Was it a family doctor?  If you can find someone to sign a sales contract, you can probably get the foreclosure postponed to get a short sale approved.

Track down the heirs and do a short sale. Foreclosures are frequently postponed.

Evictions can be accomplished in Alabama as quickly as 30 days if you use a private process server and employ nail and mail service.  Uncontested  (default) evictions generally cost $500 to $750 in legal fees and a filing fee around $200. Contact me off-forum for attorney recommendation.

If loan is owned by a securitized trust, it is highly unlikely they will exercise the due on sale clause.

Make sure you understand the passive activity loss limitation rules and the at risk loss rules, which could prevent you from sheltering ordinary income from paper losses on your investments. Do you already know about this, or do you want me to explain?

Also, don't forget about Section 179 deductions, which lets you claim a business expense deduction for 100% of the purchase price of equipment used in your business, all in the year of acquiistion, up to certain dollar limits per year.  Also limits on vehicles. Most vehicles top out at a $25,000 deduction, but some (usually trucks with full size beds) do not have that limit.

@Brenna Sullivan, just because someone makes their living as a property manager does not mean they know they law. Don't be intimidated and think that he perhaps knows something you do not know.  I recently attended a seminar by a property manager (because I like to check out my seminar competition) with over 30 years of experience, whose brother is an attorney and gave him advice on property management, and a LOT of what he was telling people was absolutely wrong from a legal standpoint. I was appalled.  

I agree with @Brad Sanford that, if possible, your mom should pay the money in order to protect her credit. She should accompany the check with a letter saying that payment is with full reservation of rights and not an accord and satisfaction.