| Negotiating with mortgage lenders to accept less than the mortgage balance for a property can make you lots of money in real estate investing. Not all short sales are potentially profitable, while some can make you lots of money.
This article guides you where to get the most profitable short sale deals.
Even though all short sales involve negotiating for a discount, some of them are a pure waste of time
As a real estate investor, you should aim for those deals that will make you more money.
1) Work directly with motivated sellers
Motivated sellers are the best source of investment properties.
This must happen before a bank forecloses on the properties.
The motivated seller must be at least 2 months behind on their mortgage payments to qualify for a short sale.
People in trouble who own real estate are the best motivated sellers. These include people going through divorce, burned landlords, people with liens, people who have inherited properties, vacant houses, expired listings etc.
These people mostly need to sell their properties, even though they have not put them on the open market.
2) Target properties that allow you enough time
In some states like Texas, when a foreclosure is files by the lender, it is usually foreclosed within 3 weeks. In other states you may have several months before foreclosure happens.
Ensure there is enough time before foreclosure happens. It can take weeks to months just to get the bank's attention.
3) Target short sales with more than one mortgage
After foreclosure, the holder of a second mortgage can lose everything. They are therefore more willing to negotiate than the holder of the first mortgage.
This means you can get 80-90% discount on the second 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
Real estate agents approach banks and list deals as short sales. They are open to any offer they can get, of course the higher the better for them.
Real estate agents will not tell you 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. Since most of your offers will be rejected, you will waste too much time.
Stick to motivated sellers and you will find short sales deals that will make you some good money.
Learn how you can run your real estate investing business from a real estate investing website that also automates your business from http://www.realestateinvestorswebsites.net/website-types |
Article Details
