Short Sale opportunity?

[rafaelsimo]

I found a motivated seller though my newspaper ad wanting to sell his home. His totally upside down!! Purchased the house at $49.9k and now owes $62k. As of now he is behind one month and dued to some other reasons can't bring himself to make the payments, therefore he will let the house go into foreclosure.

His lender is EMC Mortgage Corp, do you guys see a short sale opportunity here?

Some additional info, interest rate at 15% he is not sure, ARM, monthly payments are $770 including piti, similar houses are comping at $75k.

Thanks

[rafaelsimo]

Any thoughts?

Thanks

[Gentillionaire]

There is a short sale opportunity, but you can't start the SS process until the property is actually in foreclosure. The bank will not talk to you till then.

[kdhastedt]

If, according to your account, the owner owes $62K and the comps are $75K, he is NOT upside down!  He would actually have a bit of equity. 

At 15% he's getting screwed...he probably didn't pay a lot of other bills to get the 'special rate'...

Keith

[rafaelsimo]

Thanks for the clarification on the upside down part. Is it still a short sale opportunity?

[kdhastedt]

Someone else might answer that...I don't do shortsales and never will.

Keith

[AubreyTheAussie]

Hi Keith,

Why will you never do short sales?  You seem pretty honest and upfront.  Why is there great speculation about short sales?

Hava a good day
AA

[tcowan17]

Yes.  EMC is fantastic to work with . . . probably our favorite. You need to decide your exit strategy.  Is this a buy and hold for you or is it a flip?

Also, make sure that  a loan mod won't help this guy out.  Simply, if the hardship is temporary, a loan mod may work and you need to move on.  If not, it's worth pursuing.

Since this sound like a low end property, be careful with your numbers.  A mistake I made early in my career was thinking that the bank give me a steeper discount on low end properties -- they didn't.  I still did the deals, but the margins were slim.

[kdhastedt]

Hi Keith,

Why will you never do short sales?  You seem pretty honest and upfront.  Why is there great speculation about short sales?

Hava a good day
AA

I have absolutely no interest...

Keith

[CharlottePlayer]

There is a short sale opportunity, but you can't start the SS process until the property is actually in foreclosure. The bank will not talk to you till then.

this is absolutely the worst advice i have heard in awhile.  if you don't know you shouldn't really respond, as i have worked short sales on homes where the homeowner wasn't in foreclosure but was only 30 days behind on payments.  most lenders will talk if the homeowners is 31 days behind on payments. ask for any questions you have.

[rafaelsimo]

Thanks everyone for your input. So far, this is what I have;

- Yes, there is a SS opportunity here
- Check numbers, indeed, the property is on the low end spectrum
- EMC is very receptive to SS
- Exit strategy.

Thanks again