Posted by eugene on August 26, 2003 at 10:54:13:
Thanks very much Marc. Very useful info. Thanks.
How Does One Finance a Short Sale ? - Posted by eugene
Posted by eugene on August 25, 2003 at 12:08:07:
Hello
How does one finance a short sale ?
This seems like a simple question but it has baffled me some. Someone help!
Eugene Rakos
Finding the money is the easiest part. - Posted by Marc NJ
Posted by Marc NJ on August 25, 2003 at 23:35:42:
My first 2 s/s were funded by hard money and private funds , and I just double closed a third s/s with my retail buyers funds.
The funding comes from various ways if you dont have cash. At best you could use hard money, LOC, HELOC, or conventional financing (least preferred) means, but when the lender accepts the offer, they usually will give you less than 30 days to close, So, your conventional methods, you better have them able to close FAST, or dont go that way.
Other ways to fund short pay-off deals is to have a partner with the cash, and cut him in on a 60/40 split, but for this type of partner, he better have some other assets such as, being very knowledgable in short pay-off nego. with the bank reps. B/C Thats is a very high return, considering a hard money lender will only charge 15-18% and 5 Pts.( that alot cheaper than partner with cash).
So if the partner has no knowledge of how this types of deals work, than lower his take. Now if your cash partner has experience in S/S than a larger cut is in order.
The point here is you must find the deal that makes sense,( equity) and get the banks acceptance , then finding the money is the easiest part. Banks will ask at times for proof of funds, but that should not be a problem if you have a hard $$ lender on your team.
Good Luck, Go Get Em,
Marc NJ
Re: The same way … - Posted by Marc NJ
Posted by Marc NJ on August 25, 2003 at 23:03:01:
you would finance any other purchases. My first 2 short sales were bought using hard money and the last one I double closed it, using the buyers funds.
That was a little tricky to complete this s/s, it was a major timing problem, but I pulled it off and walked with 18K.
So, if you dont have cash to use when buying an accepted short pay-off acquistion then you would hard money or conventional funding if your pre approved or have a LOC that you could write a check on. Theres many ways to fund these deals, the problem is getting the short pay-off approved, the money is the easiest part of the deal.
Hope this helps.
Marc NJ