Buying a short sale thats listed on MLS direct from bank

[john1234]

how much do i need to put down, how do short sales work,

[ChuckFromMichigan]

through the realtor they should let you know what the earnest money deposit is anywhere from $500-$2000... next what are you looking to do with the property keep it yourself? flip it(wholesale)? are you buying with your money??  is it a good deal like what your prepared to buy for is below the current value **Example  fmv-125,000 but your buying for77,000...

[john1234]

hi, house is selling for $220,000 in an area where houses are well above $350,000 may need $50,000 or less work into it. how should i approach broker on this one, i think it's a great deal for area.

[john1234]

can i lock up deal and use transitional funding to fix, then resell immediately for higher price

[john1234]

or have the bank that owns property do a lease buy for 3 years, yes i do have bad credit.

[justin0419]

Chuck is right about the range for earnest money in general.  I've never put more than $1000 in for earnest money on any of our deals.  Short sales have another issue that other homes for sale don't...it can take months to get all the paperwork in place to actually sell the house.  Some buyers will walk away b/c they can't wait 90 days to get into a house.  Are houses actually selling in that area for 350k in this market?  Better make sure so you can move it.  I seriously doubt the bank is going to spend time dealing w/ you if you have bad credit.  That's why they ended up w/ the house in the first place...

[john1234]

realtor wants $7,000-$7,500 for earnest money but mentioned depends on what type of financing i will have to get.

[andydallas]

if its a short sale you will have to have  a pre qualify letter to have them accept the contract,,,the banks don't want to go approve everything and then you can't get financing,,,

you would need to talk to a hard money lender if you want to borrow the money long enough to rehab the house,,,they can get you a prequal letter if they are going to loan you the money

[Dave T]

or have the bank that owns property do a lease buy for 3 years, yes i do have bad credit.

If the bank owns the property, then this is not a short sale.  This is a property the bank has taken back in a foreclosure.   This will be an outright sale from the owner (the bank) to a buyer.  Banks want cash at the settlement table, they don't do any creative financing.

[john1234]

Now, lending from a hardmoney lender what type of credit would i need, or if i need to show qualifications regarding income bracket.

[andydallas]

from my experience the hard money lender wants to make sure the deal is right, in case they have to take it back, make sure you have cash to put into the deal and have cash reserves,,,your credit doesn't have to be perfect, but they want to make sure your history is that you pay your bills on time,,,,if your credit report doesn't show that, then work on your credit, and while your doing that go into areas that do not require you to get financing, like wholesaling, etc

[john1234]

I have another property i'm looking at it's a  2 bd condo $75.000 asking price $15,000 down $450.00 a month . calculations..  if i can come down to 63,000 i can turn and flip. should i lock in the deal for 30 or 60 days on this one, earnest money is $15,000 according to realtor sight.

[nsu1997]

I have another property i'm looking at it's a  2 bd condo $75.000 asking price $15,000 down $450.00 a month . calculations..  if i can come down to 63,000 i can turn and flip. should i lock in the deal for 30 or 60 days on this one, earnest money is $15,000 according to realtor sight.

  Where are you finding these crappy deals at? $15k down on a $75k condo are you serious? Do you have $15k cash to risk?

And where is the profit center? Is this condo unit worth $200k+ when fixed up? Otherwise I'm not sure how this is even slightly a deal.

It seems that you are just running around firing aimlessly. You need to learn some fundamentals and stick to them. Start with some books on creative real estate investing and also check out the free podcast at flip2freedom.com.

[eheart144]

the truth is, it depends on how much you can afford. you don't always need to start big. you're new and still need to feel the market.

[Rich_in_CT]

$50k in repairs is heavy duty man.  That's an awful big job for a newbie to be guessing on and lots of room for error.  Where did that number come from?  Did you estimate that yourself or did you have contractors go onsite and give you an estimate?  If it really is worth $350k fixed up and you're saying $220k purchase price with $50k that's not a great deal.  Price + repairs = 77% of value.  And that's providing you are spot on with everything, it sells quickly, there are no surprises, etc.  Are you calculating hold time into that $50k?  What about Realtor fees when you resell it?  Insurance while you're holding it? Closing costs? 

Not to be "that guy" but you're way over your head.  Find something cheaper than needs paint and carpet, then move up to bigger deals later.