Everybody is talking about SHORT SALES these days! The opportunity is by far one of the best in the industry. The concept of truly creating something where there was nothing is modern alchemy! We are in an industry whereby we can earn absolutely anything we want, and if we dedicate the proper amounts of time and energy into the right activities, this is actually a much more secure and dependable way to make a living than anything else I can think of.
Now, Short Sales are one of the most powerful and creative methods to create a deal where there wasn't one, but they also require proper technique and objectives to accomplish them smoothly. In many cases, an investor will try a Short Sale once, fail, and never try again, blaming the course for their shortcomings. Certainly not a recipe for success. This particular Short Sale that I am writing about was very challenging, but the rewards were well worth it!
We were contacted in March of 2005 by a homeowner who was facing foreclosure, she had been referred to us by an attorney who specializes in Bankruptcy, and he frequently refers us deals. She owed over 450k on a house that was really only worth about 390k. After 2 months of negotiating with her, and then 3 months negotiating with her lender, we closed on the property for 300k! The small amount of rehab that the house needed was done in 17 days, and we sold it for 400k!
This property, despite the long time it took to negotiate the Short Sale, yielded over a 40k profit! The total time from the day we closed aquiring the property, to the day we cashed that check was 77 days! Myself and my partner had a combined total of 110 hours into this deal, which by the way, includes waiting on the phone for loss mit reps, driving time ( 90 minutes each way ).
Another factor to consider is that I, as a Real Estate Broker, received a 5% commission on the transaction when we bought, and again when we sold. 15k+20k on top of the 40k+ profit. The exact profit of this deal, all factors considered, and expenses deducted, was just over 78k! NOT TOO BAD FOR A DEAL THAT HAD NO EQUITY!!!!!
William E. Bonnell