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Best Sources Of Profitable Short Sale Deals For Real Estate Investing
By: Simon Macharia |
| word count: 485 comments(0) views: 65 |
| Negotiating with banks to buy properties for less than the mortgage balance can make you big profits in real estate investing. |
Negotiating with mortgage lenders to accept less than the mortgage balance for a property can make you lots of money in real estate investing. Some short sales can make you money, others have little potential for profit.
This article walks you through the best sources of profitable short sales.
Even though short sales involve negotiating with banks to get a discount on the mortgage, some short sale deals are a waste of your time.
As a real estate investor, you should aim for those deals that will make you more money.
1) Target motivated sellers directly
Motivated sellers are the best source of investment properties.
This must happen before a bank forecloses on the properties.
To qualify for a short sale, the motivated seller must be at least 2 payments behind on their mortgage.
You can find motivated sellers by targeting people who own real estate and they are in legal trouble. These include people going through divorce, burned landlords, people with liens, people who have inherited properties, vacant houses, expired listings etc.
In other words, you target people who own properties they most likely want to sell, even though these properties may not be listed on the market.
2) Make sure time is not limited
In some states like Texas, when a foreclosure is files by the lender, it is usually foreclosed within 3 weeks. Some states give you several months.
Make sure you have enough time for the short sale before the property can be foreclosed on. It can take a long time just to get the bank's attention.
3) Target deals that have more than one mortgage
After foreclosure, the holder of a second mortgage can lose everything. They can therefore offer bigger discounts on the mortgage.
A second mortgage lender can accept 80-90% discount on the mortgage. If you also negotiate the first mortgage and get 10-20% discount on the first mortgage, you can make a clean profit from such short sale deals.
4) Avoid short sales listed in the MLS
Typically, real estate agents will approach banks and list properties as short sales. Of course they are looking to get high offer; the higher the better!
Almost no real estate agents will disclose the mortgage balance. And of course they will not tell you if there is one or two mortgages.
This means your offers will be blind. You cannot make good offers as a real estate investor if you do not know the mortgage balance.
Even though you can get good deals from listed short sales, you are most likely to offer more than you normally would if you had the mortgage balance. And most of your offers will be rejected, wasting too much of your time.
Stick to motivated sellers and you will find short sales deals that will make you some good money. |
Author resource:
In order to be a successful real estate investor, you must attract motivated sellers, convince them to sell you their houses, make offers that are acceptable and close deals that make you money. Learn how you can achieve this with a real estate investor web site for buying houses |
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