All Forum Posts by: Mel F.

 Thanks for the tag!

You might be barking up the wrong tree trying to wholesale a short sale. Others here might have recent experience, but here's my take:

* You need to fully understand how the Earnest Money Deposit (EMD) will work for the sale. It might go 'hard' (nonrefundable) the day you send to escrow, leaving you no time to find an end buyer. Even if it's not immediately hard, there might be limitations on refunds.

* You'll likely need to double close IF the deed from the bank doesn't have a 30+ day restriction on it. If they restrict a resale, you'll have to hold it which will likely incur some financial penalties for you, unless you're using your own cash to close.

* If you have to double close, you'll be "acting" like an actual buyer, meaning you'll likely need proof of funds and a way to show credibility in the eyes of the selling agent, bank, etc.

* You will have to get a purchase price (PP) low enough to leave room for an end-buyer to purchase from you.

If wholesaling short sales is a business model you seriously want to explore, I would suggest reading a lot more about short sales here on BP to understand the nuances/restrictions that banks typically put in place. Get your systems and documents in place before starting.

If you need help with a proof of funds, an EMD loan, or a Double Closing (Transactional) loan, let me know.

14% does seem high, but it depends on the number of doors. Is it a SFH? I've seen PMs charge a minimum per door for SFHs until you get a certain number of doors in your portfolio. Sometimes those minimums are closer to 12%+. Another factor could be whether you're renting to college students which usually requires extra "hand holding" by the PM. More details about your property would help us give a solid opinion.

The challenge with a deal that small is the amount of paperwork and processes are mostly the same whether the deal is $50k or $750k. Most of us lenders want to spend our time wisely on deals.

HOWEVER: I'm curious. What is the rehab budget and what is your exit strategy for this property?

Why is this not a pinned post somewhere!!??

Excellent summary Coty!

-Mel

Hey Karan, expecting rates to be 6% in 6 months is a bit aggressive, especially if you're considering commercial/DSCR loans. Those are typically slightly higher than traditional mortgages.

Still, to your point, if you can get a good deal and refi towards the end of next year, you'll do great. The challenge we'll face when rates go down is that property values will also inch higher.

Good news is, anyone who's listing a property now through winter is more motivated to sell, and that might be because they are either retiring from the REI race or the more likely scenario is that they purchased 3-5 years ago when rates were dirt cheap and now have to refi into something 2-3% higher - particularly for commercial loans.

Good luck!

-Mel

Try https://www.costar.com/. Their data reports for a given MSA (Metro Statistical Area) show MF construction starts. The data isn't cheap though. I've not heard of a tool that combines SF and MF since most investors typically choose one arena and stick to it. 

Based on the 10-ish reports of various Southeast reports I've read, you are correct, there are ALOT of construction starts in that region. The midwest is a bit slower but starting to catch pace.

I'll be following this thread in case someone suggests a good SF tool to track construction.