Does Short Sale = Flip?

Hi all.

Quick question...is a short sale the same as flipping a property? And if not, what is the difference?

Thanks all!
[addsig]

Comments(2)

zSaint16th December, 2003

There is a bit of a difference:
Short sale is buying a house from the bank at a discount.

Example: you find a home owner facing foreclosure. He has a a mortgage balance of $200,000. the bank may agree to accept a payoff of $150,000 because they don't need another house added to their big list of REOs.

Flip[ping on the other hand is you sell your right to buy a certain pre forclosure property to an investor.
Example, you conveince an owner to give you his property for $20,000 which leaves $40,000 in equity, you sell thecontract to an investor for $10,000 and the investor get the rest after he sells it on the market. Benefit is you get your return right away.

Hope that helps.
moneyprivate16th December, 2003

In addition a short sale can occur pre or post forclouser. A lot of times it can be incorported into a flip ie taking control of the property and negotiating the past due payment with the lender.