May 04 2008

Short Sales / Pre-Foreclosures

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These days, all the market is a flutter with Short Sales advice. What you need to know is that a Short Sale is when a lender (aka a bank) agrees to accept less than what is owed on a property. They’ll agree to this if the loan is in danger of going through a foreclosure process. Historically banks take forever to do this, but with todays market and listening to the gurus you’d think they close a deal every week. I’ve been told you can expect a bank to accept up to 50-60 cents on the dollar vs market value depending on how well you make your case and how much is owed on the property. I’ve not successfully done a deal like that so I can’t speak from experience. Check out this video from www.realestateinvestors.com
I’m interested in knowing:

  • Do you think a video format is more or less convenient than having it all written out?
  • What are the benefits? Downsides?

Take notes and compare against what I came up with.

Don’t cheat, watch and take notes and then compare. Tell me if I missed anything important. See if you missed anything.

How do you Make Money?

  • Sellers script, find out are they selling? or refi/keeping
  • Ask what is owed, how much is it worth
  • siteXdata, local mls = comps
  • if they can’t refi – tell em why – tell em others arent being straight
  • Scrubbing a list – are they cashflow negative? One option is filing for bankruptcy if they qualify
  • loan modification/forebearance/suggest a realtor with a kickback
  • Do A LOT of volume
  • have a list of bankruptcy attorneys (good to have on your team)

Action Items / Tips for newbies

  • Use Multiple “Time Triggers” to follow up on leads
  • Plan what to do when you reach a set back / failure.
  • Education is KEY
  • Find a Mentor
  • Build a team of extroverted sales people and introverted detail analysers
  • Get to know every angle of the business before you outsource the parts you don’t like
  • Prediction : Shortsales will be more likely to happen but only with professionals.
  • Profit per deal $25k – $27k if they take over the property / $4-$5k if they do the bank negotiation

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