How to do Short Sales, A Tough Investment
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 comparison of the two...
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.
You might have to finance the purchase if you aren't able to close simultaneously on the short sale.
Buying Bank Notes vs How to do Short Sales
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.
In defaulted mortgages, you will need money to purchase the bank notes - however, there are strategies to pursue certain types of notes that actually require very little capital. More on that later.
Short Sales and Buying Notes in California
First of all, Civil Code 1695 won't apply to you (when taking title in a deed in lieu negotiation, you are exempt from the constraints that equity purchasers have). As opposed to having to find a buyer and selling the property, there are multiple exits for you. They include loan mods, deed in lieu, refinances, and selling the note.
You have no licensing requirements if you're buying a bank note with a singular (as opposed to fractional) interest.
You're not subject to potential litigation as you are in lease option deals (e.g. your lease option is interpreted as a loan and you're accused of equity stripping) - in a real estate note purchases, you can simply modify your loan. You are, however, subject to changing foreclosure laws, since you're now the lender.
My Last 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.
Hows that for a change of pace?
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 comparison of the two...
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.
You might have to finance the purchase if you aren't able to close simultaneously on the short sale.
Buying Bank Notes vs How to do Short Sales
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.
In defaulted mortgages, you will need money to purchase the bank notes - however, there are strategies to pursue certain types of notes that actually require very little capital. More on that later.
Short Sales and Buying Notes in California
First of all, Civil Code 1695 won't apply to you (when taking title in a deed in lieu negotiation, you are exempt from the constraints that equity purchasers have). As opposed to having to find a buyer and selling the property, there are multiple exits for you. They include loan mods, deed in lieu, refinances, and selling the note.
You have no licensing requirements if you're buying a bank note with a singular (as opposed to fractional) interest.
You're not subject to potential litigation as you are in lease option deals (e.g. your lease option is interpreted as a loan and you're accused of equity stripping) - in a real estate note purchases, you can simply modify your loan. You are, however, subject to changing foreclosure laws, since you're now the lender.
My Last 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.
Hows that for a change of pace?
About the Author:
Interested in learning more about the Note Buying Business? Watch Hours of FREE Training Videos here: Buying Defaulted Mortgages Real-life, Up-to-Date Information for You. Visit NoteBuyingProfits.com or Call 718-783-7605 Or Click Here: Buying Bad Paper From Dean Engle & NoteBuyingProfits.com - This time on How to do Short Sales.
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