Short Papering the Short Sale

This is a deal that we did in CA showing how much easier it is to buy the note rather than buying the SS and flipping with A to B and B to C investors. YOUR TEAM: WCN - Short Sale & Note Purchase Negotiator & YOU (Investor)



Scenario: Pull short sale listings in your area.



At the same time the SS is being negotiated (3-6 months), WCN is working on purchasing the non-performing note

which can be bought at a discount now because there has been no payment made in months (constituting the SS).

As you can see on the timeline below, the note purchase takes a lot less time than the SS. Once you, the investor,

becomes the bank (after note/debt has been purchased), we now can "approve" or "counter" the HIGHEST short

sale offer that the lender would have most likely approved.



THIS HANDS DOWN BEATS THE CONCEPT OF FLIPPING THE SHORT SALE PROPERTY/TITLE

BECAUSE THERE ARE NO "SEASONING" RULES OF A MIN. OF 90 DAYS, MINIMAL CARRYING COSTS IF ANY AND

MUCH MORE MONEY TO BE MADE ON THE DEAL!





House Payoff: 500k House Worth: 400k

Short Sale Transaction 1/1/09-4/1/09

House Listed at 380k; highest offer

is 350k



Agent continues to take higher

offers to increase chances of SS

being approved. This is good for

you (investor)!!!





Note Purchase 1/1/09-2/1/09

No payment from homeowner in 8 mo



As "one off" (single note purchase), we

can buy for 375k where we would

actually take a 25k loss if we accepted

the 350k SS listed on other side.

As part of pool that WCN puts together

w other SS across US, we purchase the

note for 250k at 50 cents/dollar (payoff).





On 2/1/09, you (investor) becomes the bank, and the lender is out of the picture. If the owner were to start making payments

again, they it would go to "Investor Mortgage" now. As the new servicer, contact the homeowner & listing agent to get the

highest offer sent to you. You accept the highest offer that came in as a result of the listing being marketed on the MLS as a

short sale with a retail buyer that is STILL getting the house for under FMV at 350k instead of 400k which is what it is worth.

"Investor Mortgage" accepts the SS of 350k which results in a 100k gross spread from the purchase of the 250k note from the lender.





HOW the 100k is split up with "Investor Mortgage" as the bank and the provider of cash for note purchase



spread from 250k note purchase and 350k sale

3% commission to listing agent off 350k which is $1,750 more than the Realtor normally makes based on 2.5% commission

3% commission to listing agent off 350k which is $1,750 more than the Realtor normally makes based on 2.5% commission

3% in closing costs off 350k

Profit to be split with WCN & Investor







WIN-WIN to the 5th POWER



1) HOMEOWNER:

Because "Investor Mortgage" becomes the bank, the SS is never shown on the credit report as a "settlement" with putting the

homeowner back for a minimum of 2 years before they can buy again. All they have are the late-pays, and they are only down

for a year from the last publicly reported late pay in January 2009 in the example above. They also get to walk away from all

debt!



2) SHORT SALE LISTING AGENT:

The SS listing agent makes their full 3%.

In addition, we have minimized the effects on credit for the homeowner, and that means they buy with that same short sale

listing Realtor within a shorter time frame than if the SS had gone through with the traditional lender.

This will also increase your SS referral business for future transactions.



3) BUYER'S AGENT:

The buyer's agent makes $1,750 more in commission than they would have and will probably subconsciously sway their buyers

so submit offers on your specific listings when they have retail buyers and/or investors looking for short sales because they

know they will be receiving a higher commission.



4) INVESTOR:

If your money or your investor's money is involved for the cash purchase of the notes, then you and/or they are able to

reinvest your money every 45-60 days instead of having it "out" for 12-24 months with ONLY a 12% return like typical private

money.



5) WCN

WCN wins financially with payment for services including negotiation, expertise, connections, and time spent. In addition, we

obtain referrals for life from YOU, the investor, and the agents, all the while empowering homeowners to make

lemonade out of lemons.