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| Main » Articles » Investments |
Secrets of Making Big Money with Short Sales
| In the current depressed real estate market, it is not a good idea to
buy property at the market rate and then find out that rates have slid
even further. However, it does make sense to pick up homes of
unfortunate homeowners who have become victims to the sub-prime crisis.
A short sale basically means convincing the bank to accept a value,
which is less than what the homeowner owes while at the same time
convincing the homeowner that you have come to save him from the bank,
which could repossess their home due to non-payment of the mortgage. Everyone benefits, since the homeowner gets to walk away from his home without paying the amount and the bank is happy to avoid the long drawn process of re-possessing and auctioning the property through a foreclosure. You stand to gain a property much below market rate and on which you can make a decent profit even in-spite of the market dropping. The key is to get the homeowner to agree to your proposal, so you will have to do some research yourself before attempting a short sale takeover of any property. First identify properties for sale due to foreclosure that are advertised in local newspapers. Check out the going rates for those properties in that area and calculate the maximum amount you are willing to pay for that property. Then contact the person in the foreclosure or short sale or loss mitigation department of the bank, introduce yourself, and send them all details in writing to include the owner's signed consent. Make the bank a fair offer and be a bit flexible in case you realize that the property has good potential. Be aware that others too could be interested in that property so plan your moves accordingly. You can even buy properties that have been rented out to tenants. That way your cash flow can start the minute you acquire that property. Once you have the property in hand, it is a matter time until you find the right buyer. Therefore, it is important to know if there is a market for the property you are considering. If you are trying it out for the first time, hire an experienced short sale broker to guide you through the first few deals. You might earn less money but gain more knowledge on how the system works. Since most of these homes are lived in, you will also need to keep in mind the repair bills to be paid before selling them off. So, arrange a team of an attorney, an accountant, a contractor and a good lender. If you have a ready buyer for that property, then that is much better. You might not earn the same in all your deals but as long as you keep making healthy profits, concentrate on your average earnings. Even though the short sale route looks very simple, it is imperative that all things right from homeowner to bank to buyer fall into place as soon as possible so you flip the property quickly. Thus short sales have tremendous potential especially in the current market scenario since once the economy recovers and money starts flowing again, there might not be many such deals left in the market. | |
| Category: Investments | Added by: Antonio (19.07.2009) | |
| Views: 308 | Rating: 0.0/0 | |
| Total comments: 0 | |
