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The Short Sale Killer

Over the years I have done a lot of investing in real estate and particularly foreclosures.

When the market was going up, it was easy to save homes from foreclosure as an investor.

The simplest way to structure a deal was to take over the existing loan, take title to the house, bring the loan current and give the home owner some money to move.

If the numbers where too tight, you could fairly easily get a discount, particularly from the second loan if there was more than one.

Then values started to drop, and short sale became the new buzz word.

But over the last five years of real estate depression, short sales have become increasingly more difficult to get done.

Lenders take forever to approve short sales, and have added new contingencies almost on a weekly basis.

The contingencies are mostly designed to prevent a short sale investor from making any money.

In the banks’ mind, they are entitled to (at least) the full price that an end buyer (aka retail buyer) would pay, minus normal closing costs and commissions.

Investors who have taken on that battle have been forced into legal gray areas to edge out some profits on a few cases, while most short sale deals they try to negotiate fall apart for one reason or another.

Just last week I talked with one of the Nation’s leading short sale “educators” (aka “gurus”), and he told me first hand that one of his most successful students just sent him a copy of a check where he had made $50,000 on a deal.

However, that deal took 8 months to close, and during that time the student spent his full time effort trying to negotiate 20 other deals – none of them came through.

You can easily see how scrupulous real estate “educators” can frame these types of checks into “success stories”, continuing to impress upon their prospective students that short sale investing is still a valid business model.

Meanwhile, the most successful “short sale gurus” make hundreds of thousands of Dollars each month – not from short sale deals, but from the bogus information they are selling to more and more desperate opportunity seekers who are placing their hopes in it.

Over the past 6 months I have no longer participated in this game of chasing the dream, helping desperate home owners, trying to reason with lenders and engineer “win-win solutions” while reaping a healthy profit.

Why? Because it’s a phony game. The decks are always stacked in favor of the banks, and you can never “win” as much as the banks always do.

So I decided to take on the banks at THEIR OWN game, fight them (instead of trying to please them), and pull away the curtain from their unfair advantage.

Yes, I have removed the loans from two of my investment properties, and am now in the process of re-enforcing my rights against the common FRAUD that banks are committing each time they make a so called loan.

I will be posting more information about my journey against the lenders in much more detail. Meanwhile, please share your own experiences in the comments below. What is your story with your lender?


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Category: bank fraud, short sale

Comments (2)

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  1. Steve Vawter says:

    Thomas..
    I too am sick of ‘gurus’ taking my money for nothing!. I ask you to help I am on the verge of losing everything that i worked 20 years to get. (then got laid off). I LOVE real estate. I see deals everywhere around me.. But no matter how easy the gurus say it is to get Private or Hard money.. it just isnt so.. I CAN make people a lot of money in this time.. I will do all the work . find negotiate shortsale.. rehab and sell .. but i need money to do that.. WHERE DO I GET IT..
    Everyone i have talked to wants a credit score.. which i dont have becase of my situation in past 2 years! Look i see this as the best market ever.. around me banks are taking 30-60% off the BPO.. this is crazy..
    and the areas are great.. Jersey Shore!!.

  2. Brian Glenn says:

    Yes, the banks are making it increasingly more difficult to “flip” an approved short sale anymore. I have started to “rescind” my contracts for a set “fee” for end buyers to take my place once the lenders have neared an approval. I try and keep my fees inline with an agents commission.

    I take from your comments that you are doing “mortgage elimination” on your investment properties. Great strategy! We are doing a number of these in Utah and are working out the kinks but will prevail.

    Keep up your educational emails.

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