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Mansions Ripe for Short Sales?

The noise is getting louder every week. While entry level homes seem to have leveled off after a steep price drop, it looks like higher and homes are the next wave in foreclosures.

The Orange County Register reports that foreclosures in the high-value County has passed a record 8,800 for the month of September 2009. And the media blogs are of course all over the “bad news“!

homefeatureThe question is if these foreclosures are good short sale candidates for investors, or if we should let the banks deal with their losses and go the route of bank owned listings?

There are two criteria that make for great short sale deals.

One: The lenders’ motivation. On larger properties, lenders have to deal with larger loan amounts. A short sale on a larger loan removes a larger non-performing asset from their books. Lenders know that and act like it.

I was recently tracking a foreclosure on a $1.4MM loan. Unfortunately I got on the case too late and wasn’t able to prevent the trustee sale. However, the trustee told me that they had permission to take a bid of $765,000 at the sale. (Of course, the opening bid was advertised as $1,375,000, so nobody showed up…)

Two: Buyers willing and able to buy. Well, that’s a different story altogether. There are buyers with a lot of cash on the side, looking to put it into great deals. In the current lending environment there is no 100% financing for jumbo loan amounts. But that’s OK.

There is money for cash down payments and some buyers who can qualify. Most likely these sales will happen through buyer’s agents anyway, so it’s just a matter of how you structure your deals and setup your team.

On question that you have to keep a close eye on is what will happen with buyer confidence once a significant drop in prices is evident in areas that are now still hyped up as “recession proof”. You definitely don’t want to get in a position where you spin a lot of wheels on your short sales and can’t find a buyer in the end because your accepted offer is not good enough after the time it takes to get accepted.

Summary: Short sales for high-end properties and mansions are comming and are a very viable and lucrative foreclosure niche business. Leave a comment here if you want to hear more about our “Syndicated Short Sales” program! (And if you have any other questions or comments as well…)


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Category: short sale

Comments (10)

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  1. Manuel says:

    Hey, This is great but how we get to get you guys to work our shoet sales and what it will cost us? let us know. thanks

  2. Victor says:

    Thomas,
    I am getting really discouraged with short sales. BOA 30 day period, FHA 90 day seasoning and now my attorney just informed me that they are not going to be agle to provide title insurance on any “flips” with less than 30 days seasoning. How do we overcome these obsticles?
    Victor

  3. admin says:

    @Manuel: Thanks for your comment! Our “Syndicated Short Sales” system has a well defined position for everyone in the “syndicate”. Depending on if you’re an agent, investor, negotiator, deal finder, appointment setter. The cool thing is you can start making money without learning EVERYTHING first and getting all tangled up in the confusion and complexities of the short sale process.

    Stand by for more! Hope you are on our update list…

    Cheers,
    Thomas

  4. admin says:

    @Victor: Every rule (new or old) is an obstacle that needs to be overcome. You are right – it can be frustrating, but it starts with good education and an excellent team.

    Thomas

  5. Yunona Hagopjanian says:

    Hi, Victor!
    30-day BoFa seasoning was for a long time; now we have a solution for that-investors who are willing to hold properties for 30 days. Let me know if you need help with that
    yunonah@hotmail.com

  6. Jim says:

    is this like D.C. Fawcett’s program?

    • admin says:

      Jim:

      I’m not familiar with DC Fawcett’s program. Our program is not a short sale course. It gets real RESULTS for everyone who participates. We will do an orientation call on it very soon.

      Best,
      Thomas

  7. admin says:

    Hey Everyone – let’s get “personal”… Add your picture to the comments – it’s easy and free! Check out this blog post:

    http://cawholesaledeals.com/blog/699/wanna-be-a-short-sale-expert-one-small-step/

  8. Reginald says:

    I would love to get into luxury home short sales. However, I have two problems. First, having the earnest money that it will take so that the realtor will take my offer seriuosly. Second, a Real or Real like Proof of Funds Letter so that the bank will not reject. Any ideas on how to make these two things happen??

    • admin says:

      @Reginald: That’s the easy part! You can get a POF at http://ShortsaleTransactionFunding.com and our “Syndicated Short Sales” system takes the negotiation off the realtors hands (you’re right…that does NOT work with everyone, but hey, who can work with EVERYONE? :)

      Stand by for our special webinar…

      Thomas
      P.S.: I have NEVER paid more than $10 in earnest deposit on a short sale, and I’ll show you how.

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