Best Sources Of Profitable Short Sale Deals For Real Estate Investing

Negotiating with banks to sell you properties for less than is owed can make you big bucks. 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 all short sales involve negotiating for a discount, some of them are a pure waste of time

You should target only the profitable short sale deals as a real estate investor.



1) Work directly with motivated sellers

The best properties for real estate investing come from motivated sellers.

This is before the property gets foreclosed.



To qualify for a short sale, the motivated seller must be at least 2 payments behind on their mortgage.



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 probably have properties they would like t sell, even though they are not listed on the market.



2) Make sure you have enough time

Once a foreclosure notice is filed, you have only 3 weeks in some states like Texas. Other states allow several months.



Make sure you have enough time to get the bank's attention before they have to foreclose on the property. It can take weeks to months just to get the bank's attention.



3) Target short sales with more than one mortgage



The holder of a second mortgage can lose 100% of their investment in foreclosure. They can therefore offer bigger discounts on the mortgage.



A second mortgage lender can accept 80-90% discount on the mortgage. If the first mortgage lender offers 10-20% discount on the first mortgage, you can make a clean profit on the deal.





4) Avoid short sales listed in the MLS

Typically, real estate agents will approach banks and list properties as short sales. Of course, the more they can fetch the better for them.



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. As a real estate investor, it is in your best interest to get the mortgage balance before you can make any offer to buy a property.



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 of course you will waste too much time because most of your offers will be rejected anyway.



Stick to motivated sellers and you will find short sales deals that will make you some good money.
Negotiating with banks to sell you properties for less than is owed can make you big bucks. 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 all short sales involve negotiating for a discount, some of them are a pure waste of time

You should target only the profitable short sale deals as a real estate investor.



1) Work directly with motivated sellers

The best properties for real estate investing come from motivated sellers.

This is before the property gets foreclosed.



To qualify for a short sale, the motivated seller must be at least 2 payments behind on their mortgage.



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 probably have properties they would like t sell, even though they are not listed on the market.



2) Make sure you have enough time

Once a foreclosure notice is filed, you have only 3 weeks in some states like Texas. Other states allow several months.



Make sure you have enough time to get the bank's attention before they have to foreclose on the property. It can take weeks to months just to get the bank's attention.



3) Target short sales with more than one mortgage



The holder of a second mortgage can lose 100% of their investment in foreclosure. They can therefore offer bigger discounts on the mortgage.



A second mortgage lender can accept 80-90% discount on the mortgage. If the first mortgage lender offers 10-20% discount on the first mortgage, you can make a clean profit on the deal.





4) Avoid short sales listed in the MLS

Typically, real estate agents will approach banks and list properties as short sales. Of course, the more they can fetch the better for them.



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. As a real estate investor, it is in your best interest to get the mortgage balance before you can make any offer to buy a property.



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 of course you will waste too much time because most of your offers will be rejected anyway.



Stick to motivated sellers and you will find short sales deals that will make you some good money.



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