How To Flip A SS With No Money
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Can someone summarize how to do the deed transfer, the land trust and then closing for a short sale.
1. I understand that I am to get the homeowner to sign over the deed to my company. Then I quitely assume the 1st mortgage (do you actually ake payments?)
2. Then they also sign the land trust to ensure that I am not running away with the home, right?
3. Then how do most of you close it if you yourself do not want to buy it?
I want to be able to negotiate the deal and find a buyer in the process. I do not want to make the mistake of the lender requiring that I go all the way back to begining to get the new approval with the new buyer.
If you want to flip a SS you can have the purchaser as an LLC, Land Trust, or some entity where the ultimate buyer can buy the entity. This way the end buyer/entity does not change, just the owner of the entity. But I am told that many lender will not approve a sell to an LLC or Land Trust. Also, this will not work if the end buyer is getting traditional financing - not Hard Money and not private lender.
To flip a short sell any other way involves lieing to the foreclosing lender and sending them a fake HUD.
There seems to be mixed front on the old way of doing things, like the LLC and Land Trusts, versus just changing the seller (assigning the contract) and having a realtor list it.
Besides buying the home outright or financing what is your prefered method?
You let me know if you find another way to flip a SS. I have been doing them for awhile and have found no easy way. Cash or hard money buyers make it easy, but they want such a good deal that getting the short sell approved becomes a problem.
So, are most of your deals purchases that you then re-sell shortly after buying? Meaning no double closings.
Do you try sub2 on the 1sts or anything else to avoid coming in with all the money.
By the way.. thanks for the input. I need to sort out all this info I have in my head and make sense of it by bouncing it off someone.[ Edited by OCshortsale on Date 09/21/2007 ]
How about assigning the contract before the short sale process starts.
Something like a $10K assigment fee, $5K paid upfron and $5K paid at closing by the buyer?
Yes, an assignment fee is the best way to go if you do not want to personally buy the home.
Make sure the contract states this clearly and have some proof of funds ready to show the lender when they ask.
Question:
If you were to try to assign a contract to an investor before a short sale was approved, why would an investor purchase a short sale contract before it was approved by the lender?
ESJ
So ... splitaway ... how do you close and get your money? The SS Lender wants to see a HUD with the home owner as the seller and the new buyer as the buyer. Where are you on the HUD to get your money?
Any contractual provisions to protect an assignment fee, or pay an assigning fee at closing.. will most certainly be struck by the foreclosing lender upon review.
Read the fine print in most mortgagee short sale approvals...