Thanks for the input. I am aware there are several “exit strategies” I have here. My main goal is to get the 35k up front. So, as for
suggestion #1- that would definitely work, but unfortunately it does not accomplish what I am attempting to do. I already have a bunch of houses I have lease optioned or owner financed out and want to get some quick cash on this one.
suggestion #2- I have used this technique many times and it works well. Unfortunately, when doing a short sale the bank(s) taking the short payoff will not allow the seller to make a dime…much less 35k. Also, for future reference, I have had better luck using a POA from the seller and collecting funds that way. Either way works though.
Suggestion #3- Very creative idea…I like it! Unfortunately, in this case the buyer is already lined up with 90% financing @ 7.4 and down pamnt assistance for the other 10%. He would not switch to a 1st and 2nd because his payment on each loan would significantly increase due to higher rates.
Thanks for the input though. Your ideas are very good!!
I have negotiated a short sale with Countryide (1st lien holder) and HomEq (2nd lien holder) for a property in preforeclosure status. I have gotten Countrywide to discount to 83k and HomEq to discount to $2500 for a total of $85500.00. I have an end buyer lined up who is waiting to purchase the property for 115k with financing through Option One. Everyone is ready to close…but there is a problem. Option One, along with 99.9% of the other lenders in the country have seasoning issues and wont fund a deal that has not had the same owner on record for 12 months! So, with this in mind, how do I collect my 35k profit. I know there are a ton of people on this board who claim to have experience with closing short sales…so I really need to hear from you. All of the Gurus out there selling short sale courses neglect this issue, which is the #1 most important issue because unless there is a way to solve this problem, these short sales are next to useless for these type of quickturn transactions.
I am sure I will get a bunch of responses criticizing me for calling them useless and claiming that they can be done with ease…and these are the people who I want to engage in conversation with so I can be enlightened on how to close these. I will ANXIOUSLY await responses. Thank you in advance for taking the time to respond to my post.
Posted by David on September 11, 2003 at 22:20:04:
Well, I’ve never done a short sale, but I don’t like seeing you twist in the wind here. Here’s three suggestions:
If you can get the property yourself, perhaps you could buy it at 85, get a healthy non-refundable option deposit from your buyer, and lease option it for a year to your buyer, with the rent payment equal to the PITI on the Option One loan.
For a finder’s fee of 35K, walk the seller through the closing with the current owner/debtor.
If you can’t buy it outright on your own, get your buyer to partner with you, get the property deeded to the both of you, then have him use his credit to buy the property for 85K, then have him get a second mortgage for the 35K, which you use to be “bought out” of the partnership, and take your name off the deed.
See, I know enough to be annoying and dangerous, but not enough to be helpful, necessarily. I’m eager to hear from more experienced participants.
I’m eager to hear from more experienced participants.