What's Realistic On A Short Sale Deal??????
This is more of an open discussion than anything else. Although I'm new in the SS's and having done 4 successful shorts and working on several others I wonder how much could actually be made on each deal. I realize there is no right answer and a lot of it depends on the quality of proposal but everytime I'm done with one I wonder if I was too generous and am leaving too much on the table.
Another reason I question this was due to my earlier post where the lender and I couldn't agree and then they call me 2 weeks later to resume negotiations.
I'm probably the most unsophiticated investors out there. I don't have any miracle formula i.e. 70% of value less repairs etc. I simply go into each deal saying I have to make $20K or more or it isn't worth the time and effort. Now I know many of the "pros" who claim to make the big bucks have that sophisticated formula or so they claim.
On ****This URL Not allowed****, I read a recent article where someone profited $60k+ and I'm sitting here thinking, "Do I need another course or go to the seminar to learn why I'm not getting higher returns?" Or do I need to develop my own sophisticated formula and pass on the deals that don't meet it? 
Thanks for any thoughts
i'm kinda like you - i've only done a few shorts. i got a pretty nice price on the one i'm rehabbing now. all i did was realized how much the bank was calling ME and how long it sat on thier books then i lowballed. all i needed was a counter and i could tell from there that i'd get the place. when i know i went too low is when i don't hear back from folx! <IMG SRC="images/forum/smilies/icon_biggrin.gif">
i'm not shame to lowball and i don't feel bad - especially with banks - because all someone has to do is say 'no'. also, when i offer and i see thier counter - i see who is making the bigger strides in adjustments and i adjust accordingly. ie., i offer 27k on a 60k. they counter me with 48 and i counter back with 30. they then come back with one more @ 35 and i accept and call it a deal. they moved 25k, to my 8k. i call THAT a deal from MOTIVATED SELLER. <IMG SRC="images/forum/smilies/icon_biggrin.gif">
i don't necessarily consider this a 'not' typical deal because all 3 have been nice like this. it leaves so many options to exit. by the way, the original 60k was about 12k below market. the area's ok too.[ Edited by jackman on Date 02/26/2004 ]
The short sale acquisition technique as a stand alone will not make you rich... in fact, they are time consuming, and not terribly profitable....
I can't imagine why anyone would search them out as the method of choice. Unless deals were scarce.
Yeah, if you are looking to build a career in REI, then you must be prepared for the market highs and market lows.... and knowing how to prepare an efficient short sale proposal will allow you to take on deals that other can't, or won't.
But, you can make money, real money by carefully prequalifying the short sale candidate and make certain it fits in with your investment criteria... and exit strategy.
The perfect short candidate, in my opinion, is a property with an older mortgage loan in need of repairs that you can buy at a discount. Don't worry about nickels and dimes. This is a horseshoes and hand grenade technique.
The perfect short sale purchaser, in my opinion, has some vision, and a hands-on ability to build some equity by realizing a vision and is unafraid to turn a sow's ear into a silk purse. [ Edited by TheShortSalePro on Date 02/26/2004 ]
SSP--
I've seen it mentioned several times that SS's won't make you rich. With your experience being much more extensive than probably 95% of all members on this forum combined, what combination of REI can make you rich? I am saying that will a smile.
Actually, my wife and I live a pretty meager life. My plan was to use any extra SS proceeds after living expenses to invest in commercial property with 3 net leases. I have some duplexes that will be sold this year to be invested in a com. building already on the market.
What REI plan do you use for yourself? I agree you don't need all your eggs in one basket.
Thanks--Jim
I agree that short sales alone without the other areas of investments will not make you rich. However, you will come across a sweet deal from time to time that you just can't pass up.
That is what just happened with me. I just worked out a short sale with Option One on a property that has a current appraisal of $127K. It needs approximately $2,800 in repairs and I went to settlement on Friday and picked it up for $40K.
I have it under contract for sale for $102K so I should make about $55K on this deal.
They are out there, but they don't happen like this all the time.
Barbara
You go girl!!!!!!!!!!!!!!!!!
Passingthru--
how did you justify such a low offer to the bank?
Jim
What a nice chunk of change on 1 deal!
2 of those a year and your in the six figure category!
[ Edited by HouseBuyerGuy on Date 02/27/2004 ]