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Short sales are a great way to make money by negotiating with lenders to get discounts on properties. In many cases, you can buy properties for literally half the price of the property, which means that even if you sell at a steep discount, you can generate a great deal of income off of just one property.
As you can imagine, short sales are an extremely popular strategy in real estate investing – especially when foreclosure rates are high and lenders have too many properties on their books. Lenders are in the business of lending money, and they are not equipped to handle property in the long term. Instead, they prefer to loan money and collect interest. As a result, a plethora of REO (real estate owned) can lead to an idea situation for a real estate investor.
In a short sale, you first must get permission from the owner of the property to negotiate the short sale with the bank. A seller must be motivated in order to agree to this, since in most states short sales cannot result in any monies returning to the owner of the soon-to-be-foreclosed property. Once you have this permission, you should learn as much about the debt on the property as possible. Find out how much any repairs will cost, and do everything you can to show the bank that it will take a lot of hard work, time and effort to recoup even a portion of the money that they initially invested in the property.
Of course, there are a variety of ways to do this. Many real estate investors get quotes from contractors, broker price opinions (BPOs) and use sales and marketing statistics to make their point. Others use other strategies that involve appraisals, market analysis, news and economic trends to make a case. Every property is slightly different, and will require a slightly different approach in order to make the negotiation successful.
Short sales are a great way to get involved in real estate investing or to expand your options in this arena. If you like the sound of short sales, then watch your email to learn more about them in the second article in this series, “3 Factors that Can Make or Break Short Sales Negotiations” which will be appearing in your inbox soon.
Peter Vekselman has been successfully investing in real estate since 1996. He has completed over 1200 real estate deals, owned a construction company, been a private lender, and owned a property management company. Peter currently works with clients all over the US helping them achieve riches in real estate.
Peter Vekselman has been successfully investing in real estate since 1996. He has completed over 1200 real estate deals, owned a construction company, been a private lender, and owned a property management company. Peter currently works with clients all over the US helping them achieve riches in real estate investing. For more information please visit www.CoachingByPeter.com.
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