All Forum Posts by: Tim Silvers

I am surprised no one else posted on this today! This is some scary stuff.

It seems that non-disclosure to the respective lenders in short sales flips has already gotten the feds involved - and some investors will be sentenced to prison because of it:

http://www.connpost.com/ci_13523546

I know investors are not lawyers (Thank God!), but, given this latest news, how on earth now will an ethical, law-abiding investor know if he or she is breaking federal law when it's been vague as to what disclosures need to be made in order to avoid an "intent to defraud", in this case, the short sale lender.

Where does one cross the line from what is considered free enterprise and the essence of capitalism to what is outright intent to defraud???

Even the guys doing simultaneous "dry closings" didn't go to jail. All I've heard is that the title cos. have put a moratorium on these transactions, but that's about it!

Though I've read a great deal about it being a good idea to disclose the resale price to the short sale lienholder, where does it say in the law that it's mandatory? Again, isn't that what capitalism is all about - buy low, sell high?

If the investors in this example were using "wet funds" closing on the buy and then simultaneously selling to end buyer they already pigeon-holed as the end buyer - isn't that how most investors are doing these?

And even if you disclose to the bank taking the loss on short selling, what happens if the feds decide all of a sudden to indict investors who failed to disclose the facts of the transaction to the other side of the deal - the end buyer's bank? You might think it's a non-issue and completely legal and within your right and none of the end buyer's bank's business when all of a sudden the feds think it should be - and boom, you're screwed!

When you really look at it objectively and in general terms, how is this transaction any different than one in which the investor ( or any buyer) would have held, say, a few months and then re-sold for a profit???

Someone tell me what I'm missing here!

:roll: :roll: :roll: :roll: :roll:

Would someone please explain how wholesaling works on the buying end? I would think that most deals are going to be those that are with negative equity. It is unlikely any sane seller would walk away from equity - at least not in my market. That being said, I would think you're then limited to doing short sale/REO flips. I must be missing something here.
 
 

Maybe I'm missing something here, but, since transactional "flip" funding is limited to 1 day, and unless an investor's own cash or hard money is used, where on earth do investors such as Andre obtain the funds that will enable them to purchase, rehab, and resell for as long as needed???

Someone kindly elaborate!