Short sale funding- what and how

If you are aware of the present real estate market, it is natural that you must also have heard of the term short sale funding and the innumerable other terms that are related to short sales. These include back to back closings, short sale flips, transactional funding etc. These have been the well discussed topics so as to how to legally and ethically flip short sales. A short sale is said to be when the person who has taken a mortgage, owes more than he actually owns and to add to his worries, he is even late on his mortgage. So now, if the seller wishes to sell the home and even the bank does not want to register a bad loan in its books, then the bank must compromise and buy the mortgaged property at a price that is actually less than what is owned on the home. However if the bank realizes that more money can be net from the short sale, that if the foreclosure was applied, and then they auction or sell the property as a bank owned property, they might settle for the less than what is owned offer. Now this kind of a situation is a win win situation for the bank and also the owner as the foreclosure is prevented and at the same time, there is no bad loan record in the books of the lender. Now these kinds of transactions have dominant in today’s real estate market.

With the increase in the popularity of short sales transactions the property owners and the bank are in a profitable position. The investors help the owners and also make profits while doing so. These transactions might take about 4 to 8 months but still are famous because they involve a low risk factor than the liability. In the short sale flips, transparency plays an important role so that the transaction is legal and ethical.

This can be achieved by the disclosure of the facts by the buyer. He must disclose that his intentions are to resell the property immediately to a third party for a profit. Most of the investors around the country also use an option contract.

It is for the lender to decide that he is or he is not accepting the offer so that he has a disclosure of what is being done through the verbiage. Therefore the investor must disclose the fact that he plans to sell the property immediately for a profit. This is the basis of the short sale funding.

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Bulk Reo Investing, The Good The Bad And The Ugly

BULK REO investing is getting quite a lot of attention these days, with good reason. Bulk REO investing means generating a profit by purchasing and disposing of large groups of foreclosed property rather than doing it individually. Veteran investors who already know the ins and outs of bulk reo investing can make huge profits in a short amount of time. Being able to convert a huge pool of distressed asstes into a “gold mine” will give you a large commission of between fifty to a hundred thousand dollars at a time. This is why there are many new people flocking to the industry as it does pay our larger and faster then traditional real estate investors have known in the foreclosure investing arena.

Investors who have a list of buyers with capital in hand lined up and ready to move fast are those that succeed. However, even small bulk REO deals still mean big money. There are investors who will even carve out properties of nationwide tapes to grab the best deals. I have known investors to use their personal savings for a bulk REO purchase, just so they could get a slice of the huge profits by getting property far below market value. They then were able to put it back on the market and sell it for full price within 90 days. However, even if you don’t have personal money to spend on a bulk REO investment, you can find a money backer willing to partner with you for a fee.

It pays you to know how to find these types of deals. You do not need agents or brokers to find you these bulk reo assets. You also will find these deals on free online classified advertisting sites. When you find someone marketing these bulk reo properties, stay away from terms such as ‘seller mandates’ or ‘compiler’.

The best source of deals is to start calling Regional banks and credit unions. Just like every real estate or financial endeavor, remember that bulk REO investing does not need a huge learning curve to get involved in. You need some basic training on what to say, how to say it, and where to look and how to exit your way out of the deals.

The first thing you need to do is identify good opportunities. As an investor, it is your job to research banks before deciding approaching them so you dont waste your time. REO property statitics can be found using publicly available information if you know where to look.

The large dollar figures involved can be intimidating to a new investor along with the fact that perhaps the process for selling REO’s in bulk is not widely known to the general public.

When you recieve the tape from the bank, you need to do some due diligence so you can present it to potential buyers that it would most match their profile .

You can find that some tapes are in mixed condition, and there are times when the price matches the property, along with exceedingly low prices for damaged property. Understanding the estimated worth, will help you determine your fees. It is up to you to do the research so it is highly recommended that you take your time doing this before making a final deal to get the highest fee you can charge for finding great deals for resale.

The Real Estate Disaster Continues…. But Can You Be Saved? Yes watch and listen… The ‘foreclosure phenomenon’ has plagued the housing market; bank repossessions, REO real estate, has become an uncomfortable norm in a housing market ridden with foreclosures. To get all the Free videos in this series go to www.ultimatebulkreo.com and get the video series on how to make 7323 in equity on one deal with Bulk REO Investing And FREE Gift 39 page Top Secret Bulk REO Insider Secrets Special Report. Many real estate investors have taken this opportunity to try to buy foreclosed properties through the “Short Sale” process, but have faced many unexpected obstacles while questionable marketing practices have begun to overpower the infomercial industry targeting new investors just wanting to capitalize on obvious potential. To get all the Free videos in this series go to http and get the video series on how to make 7323 in equity on one deal with Bulk REO Investing And FREE Gift 39 page Top Secret Bulk REO Insider Secrets Special Report. Mark Bradley, successful commercial and residential real estate investor, describes his process of disrobing the short sale real estate myth. Instead applies real estate principles that can land investors huge profits in today’s real estate market. In these videos Bradley describes how he broke down the time consuming short sale business into a 5 steps. If you fail to complete any of these 5 steps it is impossible to make any money in short …
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How to Invest in Bulk REO and Non Performing Notes

Do you know how you can profit from bulk REO and NPN’s (non performing notes) and what the difference between them is? If you are a beginner to real estate investment, understanding the differences in bulk REO and NPN’s can help you determine the best way for you to make the most profit.

For one thing, bulk REO investing is becoming more popular as more banks are packaging their real-estate-owned to get foreclosures off their books. As a real estate investor, it is possible to get 50% off of the normal prices on these homes that might just need a little cosmetic work or minor repairs. You can make large profit quickly because risk is spread between real estate that has actual value and you might be able to have limited debt exposure because there are many investors that are willing to back those that are able to gain access to bulk REO sellers.

In fact, there are many people that make commission money by acting as the broker between banks and investors and this leaves no risk. When you consider 1% to 3% commission on a million dollar bulk REO package, you can see how you can make a lot of money overnight.

When considering the difference between bulk REO and NPNs, you have to be familiar with how you can make money with non-performing notes, also known as NPNs. A non-performing note is a mortgage that is at some stage of foreclosure, but not yet in the REO category. When a homeowner is obviously headed to the foreclosure stage, you might be able to make money by investing in NPNs, but the profitability and way you make profit with bulk REO and NPNs are dependent on the particular situation.

There are those that will sell these notes at deep discounts and it is possible to buy them and sell them quickly for profit. If you take this approach to dealing with NPNs, it is possible to make money quicker, without dealing with the homeowners that are behind on payments. You might be able to invest in a million dollars worth of NPNs for 20% of the unpaid principal balance, also known as the UPB. You would then sell them at 30% of the UPB to make your profit, for example.

There are a number of ways you can invest in NPN’s, including the “cash for keys” strategy or the “reduce the loan principal balance” strategy, but there are some that think the differences between bulk REO and NPNs are a matter of how “hands on” or involved you want to be in the transactions and the amount of risk you are willing to take on. It is possible to make handsome profits with bulk REO and NPNs, but you need to know what you are doing.

When it comes to investing in bulk REO and NPNs, you need to get the help you need to become an expert bulk REO and NPNs investor. As these real estate investment strategies become more popular, you can choose the right niche for your short term and long term real estate investing goals, but having real and reliable sources for your bulk REOS or NPNs are an important first step you will need to address.

Funding and Closing a Short Sale

As a result of the mortgage meltdown, beginning with sub-prime mortgages and other lending practices and then leading to increased foreclosures and declining real estate values, mortgage guidelines have tightened.  The credit crunch has led to an increase in mortgage fraud and real estate scams; thus, resulting in even more lender restrictions.  Real Estate Investors and home buyers are noticing how difficult it is to acquire financing for most any real estate transaction, especially short sales and transactions that deal with distressed real estate.

There are many techniques that savvy real estate investors have been using to close REO and Short Sale transactions, including double closings, hard money financing, back-to-back closings and even the more complicated closing using a land trust.

In any event it is important that the real estate investor who is preparing the documents and structuring the closing work with qualified real estate professionals, attorneys and title companies to ensure they are doing things right.

Transactional lenders provide funding for the short sale investor; they may also provide the document prep and closing services to close the deal quickly and efficiently.  There are many transactional funding lenders on the internet who provide a variety of services and their fees also vary.  If you choose your transactional lender wisely then you should have no problem working a short sale transaction and getting around the roadblocks investors are facing.

Jodi Funke is a transactional lender with Cash for Short Sales.com, a company who specializes in one-day funding for the short sale.  Their nationwide team of professionals, attorneys and title companies can close back-to-back transactions in every state across the nation.  They take pride in their ethical, honest business practices, always working with the highest integrity.  Work with Jodi Funke and Funding and Seasoning issues will not be a problem; learn more at http://www.cashforshortsales.com

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What Is The Bulk REO Sweet Spot Price Range?

If you are interested in getting involved in the bulk REO investment market, there are a few things you need to know. Finding the answer to the question, “what is the sweet spot price range?” is only part of what you need to know about investing in bank-owned real estate, also known as REO or real estate owned. These are properties that have already gone through lender foreclosure and it is better to purchase these properties at bulk pricing, whether purchasing one or one hundred bank-owned foreclosures, so this is when know what is the bulk REO sweet spot price range can be important.

If you have tried to purchase short sales to get a great deal on real estate purchases, you probably are aware short sales can take a year to complete, if they get completed at all. There are many steps involved, when you are dealing with the property owner and proposing a real estate deal where the bank loses money isn’t the most popular business proposition. The great thing about bulk REO investing is liens get wiped off the title, you don’t need to pay back taxes, back mortgage payments or worry about getting a title that isn’t clean.

The bulk sweet spot is the time period where you are able to purchase the property before it gets put into the retail REO listings. What is the bulk REO sweet spot price range? Most real estate investors consider deals that are offered at 50% of their normal value to be attractive, but this varies, based on the bulk REO packages you are looking at.

When you want to know, “what is the bulk REO sweet spot price range?” you need to know how to become the investor that gets a shot at these deals, while they are still in the “sweet spot”. Since this is the time you can get the best deals because the bank is able to unload several deteriorating assets at once, discovering, “what is the bulk REO sweet spot price range” is only one of the questions you should ask. The other question might be how to access bulk REO properties, when they are in the “sweet spot” position.

Finding the answer to “what is the bulk REO sweet spot price range?” depends on whether you can get the REO sellers to start calling you, when they have bulk REO packages they need to get off the books. As the bulk REO sweet spot becomes better known, there are likely to be more people taking advantage of the great potential that getting foreclosed bank-owned properties can offer, by purchasing them in bulk. While they are cheaper when purchasing them in the “sweet spot”, you need to have bulk REO sellers offering them at the cheapest prices.

By learning from experts in purchasing bulk REO, you can find out all of the things you need to know, in order to build a relationship with the lenders that are willing to offer you their bulk REO properties, when they are still in the “sweet spot” wholesale status. Discovering what is the bulk REO sweet spot price range is part of what you can expect to learn from those that are experienced in handling this type of real estate investing.

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New Developments In Short Sale Transactions (Transactional Funding, Part 1)

Whether you have done short sales in the past, or you have educated yourself about these transactions, you are probably fairly familiar with the basic function of the real estate deal. Essentially, the owner of the home gives a third party the right to the deed of the home and to negotiate with the bank for a discounted price on the home in exchange for avoiding a foreclosure. The owner of the home does not make any money on the deal, but is able to walk away with salvageable credit and no debt over their head in most cases.
In the past, real estate investors would do short sale transactions, and then sell the homes on the open market to make staggering profits. Some of my colleagues routinely made 20 to 50 thousand dollars on short sales in fairly short order once they obtained the deed to the property because people were   so eager to buy homes. However, since the real estate market took a dive, short sales have become much more common. At the same time, selling short sale properties has gotten more difficult because there are so many homes on the market. As a result, real estate investors have had to find new and innovative ways to flip short sales quickly.
There are a lot of ways to move short sale properties quickly, but before you get started with that, you need to understand some of the pitfalls that can arise thanks to more stringent lending requirements. If you do not factor in these new developments in lending practice and short sale transactions, you may end up with a property on your hands that you cannot get rid of, your short sale deal could simply fall through all together.
One of the biggest issues with short sales is lender’s requirement that the seller’s name be on the deed of the property. In a short sale, you are the seller, but if you are trying to arrange a quick flip, you may not have been planning to (or be able to) get conventional funding for the purchase of the property. Ideally, you would have your buyer bring in their funding, then purchase the home and you would get the difference. However, many lenders will not give your buyer funding unless you, the seller, are on the deed. This means that you also have to get funding for the short sale.
Sounds difficult? It certainly did complicate things for a while. However, there is a simple answer to this problem that will enable you to get the funding that you need (and your name briefly on the deed) so that you can finish your short sale flip. We’ll discuss this solution in the next lesson.
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.

www.ShortSaleFundingForYou.com – I just started implementing REOs into my real estate investing business after having several other income streams on “auto-pilot” and with anythign new comes the implementation of systems, or the alternative, FAILURE.
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When Transactional Funding Alone Won’T Work (Transactional Funding, Part 3)

Now that you understand how transactional funding works, it probably has taken a pretty big load off your mind. Turns out, despite the new laws that require your name to be on the deed of a property that you sell, you can still get funding that is not a risk to you or the lender without having to have perfect credit and a huge down payment on the property.
However, there are times that transactional funding alone will not work to smooth the short sale flipping process. This occurs in a deal in which there is a mandatory â??seasoningâ? process, which requires a buyer to hold a property with their name on the deed for a period of days, weeks or months before they can sell. As you can see, this can seriously slow the flipping process, especially if you are dealing with a buyer who wants to move in immediately. Seasoning is another method that legislatively works to help prevent fraud, but many investors feel that it is also deliberately designed to make flipping difficult and target the real estate investing community. There are two ways to deal with seasoning:
1. Find a way to work with it
2. Only invest in areas that do not have seasoning laws
It appears that many governing bodies are starting to see the flaws in the seasoning process, and many lending and legislative bodies are taking steps to undo the regulations that require seasoning. However, at this point in time, it is still something that you must consider before you flip a short sale. 
If you are required to season a property before selling, then you will have to obtain some source of funding that will enable you to hold the property for the required period. This may involve credit checks, but many investors have found that private money lenders are a good source of funding in these cases, just as they are for construction loans and rehab deals. It is vitally important that you find out the seasoning laws and rules in an area before you set up a short sale deal. Otherwise, you may find that you have devoted a lot of time and energy to a lost cause if you are unable to season the deal as required.
There are some cases in which you can creatively work out a way to enable a buyer to basically take possession of the property during the seasoning process. However, these methods must be carefully checked out with an attorney to insure that you do not jeopardize your own funding or your buyerâ??s in the process. 
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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A Basic Introduction To Transactional Funding (Transactional Funding, Part 2)

In todayâ??s lending environment, most lenders will not lend money for a transaction unless the name of the owner of a property is on the deed to the property. Lenders say that this is because they are attempting to prevent lending and real estate fraud. They say that it helps them insure that the property is actually in a position to be sold. Many of my colleagues say that the real reason is far simpler: it is a way for the lenders to make some extra money. Regardless, itâ??s in the books at this time, and if you want to flip short sales, you must find a way to deal with it.
The best way to handle this new requirement is to obtain transactional funding. In short, you need â??one-day credit.â? Sound like a problem? Fortunately, itâ??s usually not. Hereâ??s how it works, and why your credit score does not even have to be involved:
When you set up a short sale deal, you have a homeowner who is walking away from the property, and you have a buyer who is ready to pay the purchase price (plus whatever fee you have added on for your services in setting up the deal) agreed upon by you and the lender. This is an ideal situation for many short term real estate investors because it does not require the investor in the middle (you) to actually buy the property. However, thanks to this new lending law, if your name is not on that deed, then in many cases your buyerâ??s lender will not fund the deal.
So you need the funding for the deal, but you do not actually need a loan that you are going to keep up for any length of time. This means that you do not really need to go through the extended and often problematic process of having your credit checked, your income verified, and all the other hoops that you have to jump through to get a traditional loan. You just need the funding for about 48 hours so that you can purchase the property, get your name on the deed, then finish the deal with your buyer. Transactional funding does this. Basically, your transactional funding source sends you the funds so that you can do the deal with the lender. You are charged a number of loan points for this service. Then, you do the deal with your buyer, and the lender gets their money back (plus their fee) and you walk away with the difference.
Sound a little like superfluous work? It is. But understanding this type of funding will be critical to your success if you decide to flip short sales in the current lending environment.
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.

Why Invest In Bulk REO?

If you are wondering why invest in bulk REO, chances are you haven’t heard about the tremendous profit opportunity that exists by purchasing packages of bank “real estate owned” foreclosures and default homes. With the current real estate market the questions about why invest in bulk purchases can be provided with sound answers that make sense, if you are able to enter the bulk investing market.

Obviously, there are many investors that have taken advantage of single foreclosure homes and many home buyers are able to get a good deal on their home purchase. The great thing about bulk REO is that you are purchasing a package of foreclosed properties, which allows you to spread the exposure to risk and you are often able to find investors to help you finance the acquisition of bulk REO, limiting your debt exposure, as well.

When considering the answers as to why invest in bulk REO, the ability to make a profit quickly by cosmetically enhancing homes that are offered at half of their normal value is part of the reason. Banks are anxious to get these deteriorating assets off the books and are willing to make concessions to get rid of several of them at once. There are documented cases of bulk REO investors that have made almost a million dollars on a single bulk REO purchase.

When you consider the reasons why invest in bulk REO, you also have to consider the tremendous inventory of bank-owned real estate that exists in the current real estate market. It is estimated that 1 in every 399 housing units went into foreclosure during May of 2010, with more than 2 million foreclosure homes nationwide. This large inventory of bulk REO properties is a big reason the average real estate investor is searching for the answers about why invest in bulk REO.

If you consider the real estate is offered at rock bottom prices that allow for a large profit potential to be realized, it is easier to see why invest in bulk REO and when you consider the time it can take to invest in short sales on the real estate market, the reasons why invest in bulk REO becomes much clearer. For one thing, the bulk REO packages that are offered by the bank are on a list that needs to get shorter quickly, as more inventory continues to accrue. For this reason, the banks want to get rid of as many properties at once and packaging them into bulk REO sales makes the time spent on closing the deal much shorter because they are properties that are already in the REO status. The entire process is much simpler and most of the time the deals are much better.

If you are a beginning real estate investor that is wondering why invest in REO, finding the answers are easy as more real estate investors turn to bulk REO investing. If you are frustrated with trying to find the best real estate deals to invest in, it is a matter of finding an expert in bulk REO that has access to the list of REO options that are available for purchase.

Understanding The Difference Between Transactional Funding And Simultaneous Closings (Transactional Funding, Part 4)

Historically, simultaneous closings were a great way for real estate investors, buyers and sellers to all get their â??piece of the pieâ? very quickly in a real estate flip. Simultaneous closings occur when a seller signs a contract selling the property to a real estate investor. This contract is put into the hands of a closing attorney. At the same time, the investor signs a contract selling the property to a third party buyer, contingent on that buyerâ??s ability to fund the transaction. This contract also goes to the closing attorney. At this point, the contracts are in order, and if they were released, the third party would own the property. However, this does not happen until the third party brings their funding to the table with the closing attorney, who takes the money in hand and closes the deal. In a matter of days, in many cases, the seller got their selling price, the real estate investor got their cut for the flip, and the buyer got the deed to the property.
At first, this might not really sound all that much different from the closings that happen today using transactional funding. However, there is one critical difference: in a simultaneous transaction, your name, as the real estate investor, never actually goes on the deed to the property. This can be advantageous for many reasons. It may help you circumvent seasoning requirements â?? if you are not required by the buyerâ??s lender to be on the deed. It can provide tax shelters for some people in some cases. It saves you money that you will otherwise have to spend on getting your own funding â?? however fast and temporary that funding may be. It also just plain speeds the process up.
Generally, real estate investors prefer simultaneous closings to those using transactional funding, if the option is available.  As a real estate investor, it is your responsibility to determine whether or not you need transactional funding or whether a simultaneous closing may be an option. In nearly all cases, if you have the option of doing the latter, it will save you time and money. However, neglect to do your due diligence, and your entire deal could fall through if you are working in an area or with a lender that requires that your name be on that deed before the deal is completed.
As a buyer, this is also an important distinction to understand. Your funding options will likely be limited if the seller is only willing to do a simultaneous closing, and does not offer or have access to transactional funding. You can use this distinction to help you determine up front whether or not you think a deal will work for you.
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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