How to do Short Sales- A Short Comparison to Buying Bank Notes
Apr 2, 2009 Real Estate Properties
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How to do Short Sales, Not so Easy!
This article is for those of you who have tried your hand at Short Sales and realized that they’re harder than they look.
A side by side comparison…
How to do Short Sales…What is Required?
Short Sales are transactions that involve a willing borrower you’ve spent time convincing that they would be a likely candidate for a short sale.
And a loss mitigation officer overwhelmed with short sale proposals who often takes forever to get back to you documentation.
Compared to buying bank notes, short sales require bank statements, tax information, proof of income, letters explaining hardship, closing statements, and cash.
If you’re able to close a simultaneous short-sale, you may not have to fund anything. Otherwise, you have to finance the purchase from the bank.
How to do Short Sales Compared to Buying Bank Notes
Real estate note buying won’t require you to gather documentation. You will be working with a secondary asset manager or loss mitigation officer who already has the documentation for you, all you will need to do is review the information. The documents that you will need to worry about are the purchase and sale agreement and the loss mitigation officer. Most lenders will follow the same process.
Yes, in defaulted mortgages you will need money buy the bank notes. There are many strategies that you can look into that require very little capital. I will tell you more about that later.
California - Short Sales and Buying Notes
When you are taking title as part of a deed in lieu negotiation, the constraints that equity purchasers have don’t apply. You are also exempt from Civil Code 1695. There are multiple exits strategies that you can pursue, these include deed in lieus, loan modifications, refinances, or even reselling the note. In short sales, you are limited to the need of finding a buyer and selling the property.
There are no licensing requirements when you are buying bank notes with a singular interest.
Potential litigations will not arise for you as they would with lease option deals. (a lease option deal is interpreted as another loan and you will be accused of equity stripping). Your real estate note purchases will allow you to modify the loan. Just remember that you will be subject to changing foreclosure laws because you will be the new lender.
A Thought on Short Sales and Buying Bank Notes
I’ll leave you with this - whereas you may have thought short sales were a pain-in-the-butt because of the uncooperative lender you were negotiating with. You may find yourself on the other side of the table if you buy a bank note, and have an investor come to you with an offer asking you if you’ll take a discount on your defaulted mortgage in order to sell the property.
That would be a good change of pace right?
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Tags: bank notes, buy notes, cash flow notes, how to do short sales, Mortgages, note buying, Real Estate Properties, REOs, Short Sales
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