How To Wholesale Short Sale Properties
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How To Wholesale Short Sale Properties
| Date Added: January 29, 2011 08:47:08 AM |
| Author: shakir@resellerservers.net |
| Category: Real estate & Construction |
| Flipping properties, or wholesaling properties, involves selling a property to another real estate investor at wholesale price. This is the easiest and fastest way to make money in real estate investing. If you have negotiated a discount with the bank in a short sale, can you flip the property successfully to another investor? This article explores the possibilities of wholesaling a short sale property. In order to wholesale a property, it is necessary the difference between your buying price and selling price leaves you a profit. Wholesale real estate investing involves finding greatly discounted properties, then finding a buyer, usually a real estate investor to buy it. Typically the buyer does all repair work, so it is necessary to sell it at a discount. You can make profits from $3000 - $15,000 per deal this way. If the equity is not enough, you can negotiate with the bank to accept less than the mortgage balance. This is called a short sale. If you create equity through a short sale, the banks require you to close usually within 30 days. Let us explore different scenarios: 1) Assigning a contract To wholesale a property, you can assign the contract so that your real estate investor buyer closes the purchase. You contract needs to have "and or assigns" to assign a contract. Banks do not allow this clause, so this method is out if you are doing a short sale. 2) Simultaneous closing The next method involves buying and selling the property on the same table in a simultaneous closing, also called a double closing. As a real estate investor, you walk away with the difference. One way of funding a simultaneous closing is using the buyers funds to close the first transaction where you buy. Hard money lenders never used to have any problem with this. A lot of them no longer accept to do this. In addition, if you negotiate a short sale, the bank will not allow you to use the buyer's funds to close the first transaction. This means you must have the money to close it. Hard money lenders also offer transactional funding, used for just closing the first transaction, making this transaction possible. 3) Seasoning issues Lately, if you negotiate a short sale, more and more banks are now requiring that you hold the property for at least 30 days before you sell it. So you can finance the first transaction with a hard money loan, then flip the property 30 days later. Of course, your closing and holding costs could become a limiting factor in such a transaction. This clause will of course eliminate lots of deals. A deal that makes you $3000 to $5000 does not fit into this category. You would have to focus on higher dollar properties to make this work. Successful real estate investing must be driven by closing more deals spending less time, money and effort. Automating tasks and running real estate investing business is streamlined by having a real estate investor website that cuts down your workload while making you a more efficient deal maker. Learn more from http://www.realestateinvestorswebsites.net/website-types/wholesaling-houses.php |
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