Posted by Ben (FL) on May 08, 2000 at 16:11:49:
I saw your response to the question above, and thought I would ask you about my current deal. FMV = $93,000 (from two separate appraisals and from my own analysis). I know I can get a new mortgage from my bank for 80% of appraised value, with nothing down.
Balance of first is $61k, 2nd is $12k, and 3rd is $18k. The owner is behind a total of $4k. I just offered the 3rd lender $4k to settle. He said he needed to check with his boss, but that they may remove the lien for $4k, but still keep owners on the hook for the rest. I plan on offering the 2nd mortgage holder $2k. Do you suggest I approach the 1st lender about a short sale, or just pay it off with my new first mortgage?
Short sale question??? - Posted by Tim
Posted by Tim on May 04, 2000 at 09:57:25:
Hello again, my fellow real estate investors, or wannabe’s like myself! If anyone out there has experience with doing short sales, and could give me some pointers, I would be very grateful. There have been several occasions in which I have found people that are facing foreclosure, and owe on their mortgage roughly what the house is worth. I’m familiar with the fact that some investors use the “short sale” method, and ask the lender if they would be willing to accept a cash offer for less than what is owed on the mortgage. I’m aware of the fact that alot of lenders would like to avoid going through the foreclosure process if indeed they can, yet also are’nt willing to “give away” the property so to speak! If anyone out there could give me some pointers on how to best go about this, I’d be truly grateful! Thank you very much for all of you that took the time out of your day to read my post. Have a great day!
Sincerely,
Tim
Re: Short sale question??? - Posted by Joe Bowman
Posted by Joe Bowman on May 06, 2000 at 24:47:08:
My associates and I regularly get banks to accept short sales. (less money than is owed to them). We are most successful on property that is in need of repair. The more repair needed, the better the discount. We recently were successful in getting a bank to reduce their $80,000 loan (including late fees, attorney fees, etc) down to just $38,500! The lender will be more inclined to accept a short sale if the offer is made on an official written contract showing a substantial down payment. The bank will also be insistant that the owner not receive any money from the transaction. It is best to purchase the property “as is” and to close the deal quickly. The bank may want to do an appraisal and inspect the property before they make their decission and the loan must usually be in default. They may even insist on seeing a tentative closing statement and get an updated financial statement from the owner before giving the final oK. If the loan is a junior lien and about to be wiped out in foreclosure, they are more likely to discount than a first mortgage with lots of equity behind them.
Re: Short sale question??? - Posted by Ben in Ohio
Posted by Ben in Ohio on May 05, 2000 at 06:49:36:
You have to be careful with these transactions. E-me for more info.
Re: Short sale question??? - Posted by Soraya
Posted by Soraya on May 04, 2000 at 12:30:45:
Depends on the area of town you are looking to invest in. If you want to invest in lower middle class areas. (and if you don’t want to use much of your own money)
Contact a hard money lender who will lend 70% Loan to Value. Tell them what you want to do. Get them to write an authorization letter on their letter head that they are committed to loan $X on the property (properties) and will provide the money within 7 days. Offer the REO dept (or the person at the bank who can make a decision on a short sale) 70% of their asking price with payment within 7 days. For some reason lenders believe lenders more than they believe anyone else. The letter from the hard money lender will open doors that an individual can’t.
In a Sellers market like it is in San Diego right now, REO’s in the upper middle class and lower upper class go for about 95% FMV.
Soraya