Short sales of pre-foreclosure properties may be the best real estate investing opportunity available right now! Unless you’ve been living in some cave somewhere, you know about the “real estate crisis”, record foreclosures, and millions of houses in foreclosure and being taken by the banks. (listen to the story about the sky falling on real estate investors)
New real estate investors should learn the steps to completing a short sale, to decide if it’s a type of deal they want to put in their “arsenal”, or bag o’ tricks! Many successful investors have been waiting for the stars to align as they are now for a long time, so if short sale investing is something you want to pursue, start by getting “the basics” in this video.
Some important points and steps when finding a foreclosure property to do a short sale on include:
- Find a property that’s a good candidate for a short sale, this includes any property that is several months behind in payments. The condition depends on your skill and exit strategy.
- If the property has more than one mortgage, (from 2 different banks) preferably with a large second mortgage, you may have a winner!
- Know your exit strategy BEFORE going in! This is critical!
- Seller must be willing to work with you, be flexible, and be communicated with every step of the way. The seller must be willing to vacate the property, as well as write a hardship letter to the bank, provide tax returns, pay stubs, (if employed) and bank statements. If the seller is difficult, you may want to think twice about taking the deal.
- I highly suggest you outsource the negotiations with the bank, unless you’ve got a lot of time on your hands, like paperwork, and have the patience of a Saint. Personally, I’d rather have a root canal.
- Make sure your exit strategy overcomes the “seasoning” issue. Yes, you can do a double close, but it’s different that your wholesale deals. Get training if it’s something you’ve never done!
Short sales can change your life as a real estate investor. They’re simple, but not “easy”… now go make an offer!
