Short
Sale Secrets
by Dwan Bent-Twyford and Sharon Restrepo
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Did
you know that when you come across a property with no equity you
can discount the mortgage? Most folks don't. Here is a brief
example: You find a distressed property with a $75,000 balance
on the mortgage. The problem is that the property is only worth
$75,000. What do you do? 95% of investors just walk away.
Not
us! This is when we get busy.
We
contact the bank, make a cash offer of say $45,000, they accept,
we close and everyone is happy.
Anyone
actively investing in foreclosed and distressed properties has
no doubt come across one major problem… Finding deals with
equity! Trust us, this is a nationwide problem.
There
are so many foreclosures out there; unfortunately most of the
homeowners owe what their property is worth. We find that most
investors walk away from deals with no equity. They either
don’t know what to do with a no-equity deal or they are
unwilling to put forth the effort necessary to make the deal
work.
In
situations like this, we short sale the mortgage. “What is a
short sale?” You ask. A short sale means getting the bank to
accept less than is what is owed as payment in full. There are
several steps that will ensure your success when working a short
sale.
First
of all, you must have the homeowner under control. Many
investors are under the misconception that they can buy the
property directly from the bank while it is in the foreclosure
process. Not true! The bank does not own the property until the
moment of the courthouse sale. You can buy the mortgage and
finish the foreclosure process, but you cannot buy the property.
You’ll have to work hand-in-hand with the homeowner if you
plan to short sale.
Here
is how it works: A homeowner calls you and tells you he is in
foreclosure; owes $95,000 on his property; it’s worth $100,000
and he is 8 months in arrears. He wants to move on with his life
but can’t sell his house because he owes what it is worth.
Here is where you come to the rescue. You meet with the
homeowner and have him sign an “Authorization to Release”
form (this gives the bank permission to speak with you about the
account) and a sales contract for the amount you are willing to
pay for his property. In this scenario we are going to offer
$50,000.
Next,
you call the bank and ask for the Loss Mitigation Department.
This is the department that handles properties that are in
foreclosure. Tell the person handling the account that you are
trying to help Mr. Smith with his foreclosure and you are
willing to buy the property from him. However, due to it’s
poor condition you are only willing to pay $50,000 as payment in
full. Fax the sales contract for $50,000; comps in the area; an
extensive list of repairs that are needed to bring the property
up to marketable condition; a net sheet (a title company will
help you with this); and some really bad pictures. The bank will
then review the information and make a decision. Let’s say
they counter at $65,000; you counter again at $55,000; they
accept! It’s that simple! We short sale many, many mortgages
every year. Banks are not in the business of owning properties.
They would rather short sale a mortgage than go to the
courthouse steps.
We’d
like to share an incredible deal one of our Foreclosure Fortune
Hunt graduates put together. Her name is Cathi D.
Cathi
was helping some friends find a home in which they would live.
They came across a property valued at $200,000 in a distress
situation. The property had a mortgage of approximately $197,000
and was in need of several thousand dollars of repairs. Based on
the fact that the current owner owed what the property was worth
Cathi did what any prudent investor would do, she short saled
the mortgage.
She
contacted the bank and began the process. Her first offer was
$50,000. The bank laughed and told her to make a higher offer.
After several phone calls, the bank agreed to accept $130,000 as
payment in full. That is a $67,000 discount!! With the new
payoff of $130,000, she then flipped the property to her friends
for $140,000 and made a smooth $10,000 in less than a week!!!
Personally, we think she gave the property away too cheap
(smile).
This
is a typical case where having a firm grasp on creative real
estate enabled Cathi to turn a “nothing deal” into a
“something deal” just by picking up the phone. She made
money (and a lot of it) on a deal most investors would have
passed by. The bank was happy with the discount, Cathi made
$10,000, and her friends bought a home with $60,000 equity!
So…
the next time you get a call from a distressed homeowner with no
equity, what will you do? Walk away or make a few simple calls
and turn your time into cash? We certainly hope you will make
the small effort it takes to short sale the mortgage. It is such
an easy way to make money in an industry where great deals are
tough to come by. When you short sale a mortgage, not only are
you helping yourself; you are helping a very distressed
homeowner and giving them the chance to start over.
Our
"Short Sale Secrets" program offers step-by-step
instruction in how to successfully discount mortgages. Being
able to discount mortgages sets you apart from the average
investor. You can't afford not to utilize this program. In
addition, this course also covers, short sales, leases, and
rentals.
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Also
included are two CD's with step-by-step instruction. Here are
some of the topics covered in our Short Sale Secrets training
program. This program is designed to teach you how to handle all
the no equity deals you will find. Most investors agree that
nine out of ten deals have no equity. With the proper tools…
who cares!
SHORT
SALE SECRETS
TABLE OF CONTENTS
- Introduction
to The Authors
- Dwan’s
Story
- Sharon’s
Story
- The
Birth of Financial Freedom Through Foreclosures
- What’s
Happening Now
- Dedication
- Welcome
Letter
- What is
a Short Sale?
- Why Do
Banks Short Sale?
- Successful
Short Sales Start With The Homeowner
- Agreement
with Homeowner
- Move
Out Date
- Who is
the Buyer?
- Six
Steps For Successful Bank Short Sales
- Additional
Information The Bank May Ask For
- The
Bank’s Inspection
- When
The Bank Says No
- When
The Bank Says Yes
- Should
I Try To Short Sale a FHA, VA or PMI?
- Closing
a Short Sale Transaction Can’t Close on Time?
- Defending/Delaying
a Foreclosure
- Does
The Homeowner Still Owe The Bank Money After The Short Sale?
- Negotiating
With a Second or Third Mortgage
- What Do
I Offer The Second?
- Why Do
I Deal With Each Lienholder Separately?
- Negotiating
Other Types of Liens
- The
Closing Date
- Discounting
a Mortgage
- Can I
Discount A Second or Third?
- What
Happens To The Homeowners Credit If I Buy The Note?
- Judgment
Purchase
- No
Collateral – No Loan on Notes
- Reinstate
- Forbearance
Agreements
- Owner
Financing
- Avoiding
The Due-On-Sale Clause
- What If
My Buyer Defaults?
- Retirement
Plan
- Government
Subsidized Rentals
- Lease
Options
- Lease
Purchase
- Sublease
- Sample
Lease Agreement
- And
More!!!
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Price
is only $799.00
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