Selling A Mortgage
Can You Wholesale A Short Sale Property?
Selling a property to another Real Estate Investor at a discounted price is called flipping properties, or wholesaling properties. It also the quickest and easiest way to Make Money In Real Estate investing.
If you have negotiated a discount with the bank in a short sale, can you flip the property successfully to another investor?
This article analyzes the possibilities of flipping short sale properties.
In order to wholesale a property, it is necessary the difference between your buying price and selling price leaves you a profit.
Wholesale Real Estate Investing involves finding greatly discounted properties, then finding a buyer, usually a real estate investor to buy it.
You sell it at a discount because the buyer does all the repair and you walk away with some money.
typically you can make $3000 to over $15,000 per deal wholesaling properties.
If there is no enough equity in the property to allow you to make a profit, it may be possible to negotiate with the bank so they accept less than the mortgage balance. This is called a short sale.
If you create equity through a short sale, the banks require you to close usually within 30 days.
Let us explore different scenarios:
1) Assigning a contract
You can simply assign the contract to your wholesale real estate investor buyer to wholesale a property.
In order to do this, your contract needs the buyer to have “and or assigns”. Banks do not allow this clause, so this method is out if you are doing a short sale.
2) Simultaneous closing
The next method involves buying and selling the property on the same table in a simultaneous closing, also called a double closing.
Your profit is the difference between your buying price and your selling price.
One way of funding a simultaneous closing is using the buyers funds to close the first transaction where you buy. A lot of hard money lenders did not mind this. However lately, most of them will not accept this.
Also, most banks no longer allow you to use your buyer’s cash to close the first transaction. This means you have to raise the cash to close the deal.
Hard money lenders also offer transactional funding, used for just closing the first transaction, making this transaction possible.
3) Seasoning issues
Lately, if you negotiate a short sale, more and more banks are now requiring that you hold the property for at least 30 days before you sell it.
Meaning you can finance your purchase with a hard money loan and sell the property 30 days later. Of course, your closing and holding costs could become a limiting factor in such a transaction.
This clause will of course eliminate lots of deals. A deal making you a profit of $3000 – $5000 is most likely eliminated. Properties that make you more money are better for this type of transaction.
In order to run a successful
real estate investing
business, it is necessary to increase efficiency so you close more deals using less time, money and effort. Learn how you can automate Real Estate Investing Business from an interactive real estate investor website from
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Mortgage sales call (Selling a mortgage on a difficult arguing customer)
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