Advice On My First Short, Please...
Hi,
I enjoy this site, lots of good exchange.
Thank you for that!
I am working on my first short sale.
Have LeGrand/Kaller course, went to Dwan/Sharon 2-day. So, I understand the basic mechanics, but miss details, obviously, and... experience. So I'd highly appreciate your input!
Got the deed to four houses.
Three have no final judgment yet, so there's some time.
Fourth one:
Auction set for 3/11
FMV as is: 350k+
300k first, Fairbanks, from 8/02 (BPO 350-390k)
60k second, Wilshire, same date (BPO 360k)
In f.cl. since 5/03, so obviously costs accrued since then. Now vacant. BPO's were just drive-by's - looks nicer from outside... (owner had realtor start on SS, who since dropped the ball, that's why there's BPO's aready).
There's plenty of bullets: owner lost job, problems with house (busted pipe just two weeks ago => emergency repair from city), vacant, non-paying tenants b4 that, can find low comps.
Now, my exit would be to get it at around 300k or less and flip it for 340-350 (realistic).
Spoke to lenders, Wilshire said it's enough time, Fairbanks put in new rush BPO today (after I made it clear that drive-by is not doing justice to inside condition... ) and I will let Realtor in. 
So far, so good.
My questions:
Even if their BPO comes still back at 360k, I could make sense out of 82% (no, it's not FHA, just to use the ballpark) of that to first (295k), 5k to second, and some back taxes/w&s.
Those 82% do relate to the net to first mortage, right??? Or to total offer amount on contract?
Not clear on that one...
So, in above example with 360k BPO, 82% of that to 1st (295k) plus 5k to 2nd plus 3-5k misc. (tax/w&s/city emerg. repairs) would make up a sense making offer of 303k, if presented right. You agree?
If I can lower new BPO, would you lower the offer accordingly, or not overdo it...?
Also, transfer taxes of 1.4% are usually paid by the seller here in NY... so those would have to be put in as well (another 4k!!).
However, in Kaller's or Lou Brown's HUD-I examples they always showed up as being covered by buyer/me... Help! 
Which one now?
Is it b/c bank - after taking a hit - wants to cover as little of the rest as possible?
Lastly, since I am not presenting myself as the buyer, I wanna use XYC (land) TRUST, my buddy as trustee (plus my po box as address), as the buyer. Makes sense? Better suggestions?
If I flip to enduser who gets new loan, I would have to do double close, right? And watch out that they don't require seasoning...
(Could I get around the seasoning issue by making it appear as if trust was still held by original owner for estate pl. purposes?)
And ask for 45 days time to close (to make sure my guy has financing in place), or is 45 days asking for too much?
If wholesale to other investor, he could just step into my shoes (take over benef. interest and pay me assignment fee in cash, I guess). 4-5k saved in transfer taxes right there...
Somebody told me about putting a new second mortgage (third in this case) on there to realize the profit.
What do you think?? Sounds shady if bank would realize that they take a hit but junior mortgage gets paid off in full, wouldn't it?? Or would they never see that anyhow?
Could that bite me later?
What's your favouriteway to get paid in SS?
Dang, got a little long here... Apologies.
But hopefully this serves other readers as well.
Whoever cares to fill in all the right answers gets a dinner next time he/she is in NYC!! (Upon successful completion of mission, of course 
)
Thanks a ton!
Falk
It is 2:30 AM so my reply might not be the best. I don't know as there are any hard and set rules regarding closing times but... Generally banks want to dela with someone that has cash in hand and can close fast! This is key to getting the best deals. Frequently this means "hard money" and then a refinance shortly therafter. That said I would "do what you can do".
Not sure about NY but the beneficial interest in the trust sounds like the way to go to me and is how I would do it.
Getting the title to four sounds like your really getting after it!
Best of Luck!
I guess that was too many questions at once to swallow??
Do I have to increase my shamless bribe? A milkshake on top of the dinner in NY?
(Hint: I'd do it!)
Thanks,
Falk
PS: I just bought the SS Primer, I am sure there's some of the answers to my questions right in there.
Off I go to read it...
I have not done this. I am closing on my first SS on Wednesday but mine is not complicated as I will keep the property and the owner is close and can come to closeing. But I have spent time researching how to have a closing so that 1) owner does not have to come 2) lessen any seasoning issues 3) have another buyer in the wings and want to lessen closing costs
You definately need a real estate attorney that works with investors and will do a simotaneous or double close. Ideally you want to have one close - a simoltaneous close. Use your new buyer's money to pay the bank. There is a very abbreviated HUD drawn up for the bank to have. It does not show your money or the actual purchase price - only the bank's net. Then you have the original owner sign the HUD. The original owner can be at the closing or you can go get it signed. If you, your corporation, or someone else that is trusted to you, has the Power of Attorney from the owner then they could sign the HUD.
You will need a very sophistacated RE lawyer and one that is not very conservative to do this.
Brenda
For the first, you make your offer based on the BPO, not what is owed. Unfortunately you wil probably not know what the BPO is. They might tell you, and it might even be the truth. Ask the BPO agent if they will let you know if you are in the ball park. Do some reading up, but the BPO is key. For the second you hope for 10% but offer lower to start.
Just make a low offer. Especially on an expensive house that needs work. Go really low. You can always come back up. Tell them that you had only been in the house once before and it was at night. Since you were in the house at the BPO, you realize what a wreck it is and must change your offer.
Brenda