Why Sub-To And Not Shortsale?
Hi, im just wondering why you would do a Sub-to over a shortsale? I have been reading a lot about short sales and am in touch with an investor who does them and they seem a little more practical. Basically she find a prop in pre-forclosure, gets the auth to release, then she contacts the bank and makes a low offer on the house and they exept and then after they accept they give one month to pay in full so then she has the prop deeded to her in escrow and in the meantime she finds a buyer and does a double closing. she usually averages about 20-40k profit. she also says that the bank accepts around 90% of the time. there is a little more to it than this but thats the basics and it seems pretty easy. we are going to do a deal with her soon. what are your thoughts. have you heard of doing it this way before? thanks, Ryan[ Edited by I_Need_Help on Date 08/17/2004 ]
There's a "Short Sale" forum right below this one on the list.
They are not the same thing...
ON a SHort I have always had to have "cash" and nothing in the way of 30 day financing though I am sure that could happen. Ask the shortsale pro..
[addsig]
not 30 day financing. when you get a buyer within the 30 days there financing pays for it. It would actually be 60 days becasue after 30 days you can have the process posponed 30 more days. i know the short sale forum is below this one. i put it in the sub-to forum becasue i want to know why you would bother doing a sub-to when you can do a short sale with less risk and quick cash. thanks
In a short sale you need to convince the bank they will not get what they loaned on the house. SO usually a shortsale is used when a property is run down or in need of some rehab. A bank will usually not short sale a house in good condition when they can get what they loaned on the house. With a shortsale like you said you come up with a buyer...if you can't then it reflects badly on you if you don't buy the house from the bank. The numbers you gave 90% for 20K to 40K profit is crazy. I'm not saying its not true, but she knows how to pick them. I'd say if that is the case she is a rarity or she has some great connections.
Subject to can be used whenever...rehab/nice house/anything. SUbject to gives you the luxury of not having to flip the contact to another party or worry about having to finance it yourself.
Don't get the idea you can shortsale the bank for 20K to 40K 90% of the time. If it were that easy we'd all be millionaires in a few months. Maybe she knows something I don't though...IM me her contact info. I'd like to do business with her.
yes you are right about the rehab part and that is why the bank will lower the price. yes I hear that the bank will lower about about 15-20% a lot of the time is you prove to them why. (pictures, lead paint, etc.) like I said. I have not done one yet but this is what I hear. thank you for your response. I was at a meeting with Kaller and he has made millions doing it and was explaining some strategies that sound pretty good. I want to thank everybody on this site for all of their help. I have learned a huge about of things off of this site from everybody and it is great that people are willing to help. I was unaware of all of the options that can be used to aquire real estate no more than 3 monthes ago. i am putting together some deals right now and i will keep you updated on how they go. once again, thanks, Ryan