All Forum Posts by: Steve Hallman

The bank will want to know if you have any assets that could be used to repay the loan on the FL property.

If you (because it's your name on the mortgage) have equity in the GA home, they could refuse the short sale and want you to liquidate that asset first.

You should (if you haven't already) sign a purchase and sale agreement for a sub2 and deed the GA property to your mother.

Then you could claim no interest in the GA property.

I'm assuming these are two different lenders. If it is the same lender this could be complicated.

Do not let the lender of the GA property know you sold it on a sub2. Lenders generally do not care when they are getting paid but usually have a clause stating if you sell (deed) the property to someone, the balance of the loan is due immediately.

That is what I would do.

You should consult with a real estate attorney ;-)

I need info on how to use a "throw-away" LLC to purchase short sales and REOs in Georgia. I want to create a LLC for a deal, then sell my interest to a new buyer. I know people are doing this In lieu of assigning the contract.

Obviously, a name and articles of organization must be filed with the $100 fee.

The Secretary of State says:

The articles of organization may be signed by any member of the
limited liability company, any manager if management is vested in one or more managers, or by an organizer if the entity has been formed but it has no members or managers. The filing attorney may also sign the articles of organization.

Is it best to NOT name members, eliminating the need to add/drop later.

If no members are listed, who signs the purchase/sale agreement? Can the "Organizer" do this? Should this be an attorney? Will the bank ask for articles of organization or something proving, that person has the athority of the LLC to enter into a contract?

Any help or suggestions greatly appreciated.

Thanks!

Great advice so far.

I'll add my 2 cents...

Outsource, outsource, outsource

and

Only take the deals that make sense.

Find properties with conventional loans, in areas with high and low comps.

Send the BPO agent low comps 24 hours before the on property BPO evaluation.

You should FIRST, find (local) lenders, credit unions etc that will not have seasoning issues. Tell them UPFRONT that you are an investor and purchase great deals and immediately, resell (not "flip") to retail buyers and would like to refer them clients.

Then give the buyer an incentive to prequalify with these lenders.

If they insist on using their own lender, ALWAYS require a conference call between your closing agent and the buyers lender and disclose them of the situation. As long as you are honest and upfront, most conventional lenders will not have a problem.

It's only when they feel like facts were intentionally witheld, the FRAUD warnings go off and spoil the deal.

There is nothing fraudulent or unethical about buying low and selling high, as long as the home legitimately appraises for the B-C transaction.

Just be upfront and disclose everything BEFORE closing.

Typically a good mitigation service can add value. They allow the investor to seek out more preforeclosure prospects and the realtor to concentrate on marketing.

Mitigation firms (or individuals) have different pricing models. Some want to know a maximum strike price, see comps and decide if it is possible. If they feel your offer/strike price is not feasible, they will not negotiate. Some charge a fee upfront, some do not.

I prefer that they do not get paid until, I do. I prefer they have a stake in the margin.

However you work it, the mitigation fee is listed on the HUD-1 after line 1300 for Additional Settlement Charges. Always start at 2% and allow it to be negotiated down to 1-1.5%

Banks sell short at 80-90% of current market value. The trick is to get the bank to sell it for 80% of distressed value and resell it for 90% of retail value.

You know the value is determined by the BPO agent. I know the "GURUS" talk about being there for the BPO and influencing it if possible.

Well, the BPO is the most important factor. BUT here's what the GURUs don't tell you.

The hard part is influencing the BPO agent to value the property as a distressed 30-60 day value. There is a lot of pressure on the BPO agent not to use distressed properties (REOs/Foreclosures) in their comps. If they do, they are guaranteed a "Quality Control" audit. They are scored on their work and may not get more BPOs from the clearing house if they do not maintain a certain score.

What can you do about this?

Maybe nothing just be aware of it.

Try talking about the home owner’s hardship and how they REALLY need this deal to go through. You've got to give the BPO agent a reason to buck the system.

*******************************
BIGGEST TIP OF THE DAY........
If you wait till the BPO agent arrives at the property to try to influence the valuation,........ You’re too LATE!

She has already got comps and has formed an opinion about the property’s value.

You've got to tell the bank to have the BPO agent call you 24-48 hours before. Talk to the BPO agent, build rapport. Ask how many BPOs they do. Ask for an email so you can use their service in the future. SEND her a friendly email ASAP and enclose some area comps for her convenience.

Good Luck!

Banks sell short at 80-90% of current market value. The trick is to get the bank to sell it for 80% of distressed value and resell it for 90% of retail value.

You know the value is determined by the BPO agent. I know the "GURUS" talk about being there for the BPO and influencing it if possible.

Well, the BPO is the most important factor. BUT here's what the GURUs don't tell you.

The hard part is influencing the BPO agent to value the property as a distressed 30-60 day value. There is a lot of pressure on the BPO agent not to use distressed properties (REOs/Foreclosures) in their comps. If they do, they are guaranteed a "Quality Control" audit. They are scored on their work and may not get more BPOs from the clearing house if they do not maintain a certain score.

What can you do about this?

Maybe nothing just be aware of it.

Try talking about the home owner’s hardship and how they REALLY need this deal to go through. You've got to give the BPO agent a reason to buck the system.

*******************************
BIGGEST TIP OF THE DAY........
If you wait till the BPO agent arrives at the property to try to influence the valuation,........ You’re too LATE!

She has already got comps and has formed an opinion about the property’s value.

You've got to tell the bank to have the BPO agent call you 24-48 hours before. Talk to the BPO agent, build rapport. Ask how many BPOs they do. Ask for an email so you can use her service in the future. SEND her a friendly email ASAP and enclose some area comps for her convenience.

Hope this was useful.

Short Sale Investing is not as easy as the Gurus make it BUT they are abundant and have very little risk.

GOOD LUCK!