Targeting Short Sales for Note Deals

Short sales have been a widely held topic in the real estate arena. Why? It’s because it’s a win-win deal for both the seller and the buyer – a short sale can get a property holder out from bad debt while buyers see the price of a short-sale home worth the hassle. Scott discusses how note investors can target short sales as warm leads for potential opportunities for deals and larger lists of non-performing notes. As he outlines the things you can do with short sales, learn the three reasons why investing in short sale deals is like hitting the home run and the things to keep in mind before you jump right in.

"This episode is going to have a lot of impact on a lot of real estate investors out there if they take to heart what I end up discussing. Our topic is about short papering short sales. A lot of people are like, “Short sales, that’s an ugly two-word phrase. There’s nothing about short sales. How am I going to invest in a short sale?” As note investors, one of the great things is you have to realize that we’re buying distressed debt and distressed debt comes into play when we’re dealing with short sales. Short sales are a borrower who is upside down in their property. They are usually behind and they negotiated with the bank to allow them to sell the property or to list the property with an agent and try to get it sold for cash at an amount below the total payoff. The only person taking a short in this is the borrower. The borrower is owed something, but the lender has to approve the reduced pay off from them.

What’s great about this is we cut our teeth on short sales years ago. Back in 2007 to 2010, we’re doing short sales in a variety of different states across the country. It’s a different ballgame on what it is now compared to what it was a decade ago. From talking with agents specifically, it’s starting to see an increasing amount of realtors dealing with short sales or short sale agents that are starting to specialize in that aspect. One of the great things that you have to realize is there are some bonuses to looking at short sales right off the bat versus dealing strictly with the bank’s list. When we get a listing from the bank, you don’t know initially if it’s occupied. It might say it is, but you have still got to double check it. You don’t know which way the borrower is going to go. Do they want to strive to stay in the house? You can tell some of the stuff by the pride of ownership when you’re driving by or if they’ve tried to make payments in the backend of the last several months if you can see the servicing notes."

Listen to the full podcast episode here: https://weclosenotes.com/ep-450-targeting-short-sales-for-note-deals/