WHAT IS SHORT SALE INVESTING?

Amass Wealth With Foreclosure Home Investing

What is Short Sale Investing? It's probably one of the best ways to amass wealth in Real Estate today. Whether you are among the many new foreclosure investors who've heard about how to make money with preforeclosure houses or foreclosure home investing pros, you have to be excited about the opportunity to get rich buying preforeclosure homes. We have the best opportunity in years, maybe decades, to buy at a huge discount.

What is Short Sale Investing?

Short sale investing is a specific type of preforeclosure realestate investing. It's where the lender agrees to take less than what's owed on the property. With more and more foreclosures on the horizon, and, what appears to be a recession starting, lenders are becoming more agreeable to doing short sales.

Lender Costs With a Foreclosure Home Sale

But, really, why would lenders agree to take a loss? Because it's the lesser of two evils. If they go through the mortgage foreclosure process they'll, in many cases, lose more money than they will with a Short Sale.

In a foreclosure lenders have costs, such as:

• Taxes
• Maintenance
• Mortgage Insurance
• Hazard Insurance
• Interest on Principal
• Lawyers Fees
• Damages
• Any other Foreclosure Fees
• Value of Home is Decreasing in a Declining Market

And, in the end, they probably won't be able to sell the home themselves for any more money than was already offered for a Short Sale -- maybe even considerably less.

In this market, it's in every lenders' best financial interest to accept Short Sales. And, of course, it's also in the best interest of the homeowners in most cases.

Homeowners should be aware though, that the lender can issue a deficiency judgment to them. It's also possible that the lender can issue an IRS 1099 for the short fall between what's owed and what's paid for the home.

Ins-and-Outs of Preforeclosure Realestate Investing

If you're a real estate investor considering getting involved with Short Sales, you can approach it in two ways:

• On Your Own - You can subscribe to a Foreclosure List Service to get the most recent Notices of Default (NODs). You can even try the best List Service for free for 7 days. Using this List Service will save you countless hours and is worth it's weight in gold.

  Or you can regularly go to the courthouse to acquire the lists. Then, market to the homeowners either through mailings, which we believe is the best way, or phone calls, or door knocking. Don't be surprised if the homeowners don't answer their phone or come to the door. Remember, they're being harassed by creditors, investors and Realtors®.

  
  
  
• Use the Services of a Realtor® - This approach has some advantages and some disadvantages for any foreclosure investor. One of the advantages is the Realtor® has many Short Sale properties available through the Multiple Listing Service (MLS). They can easily locate the many Short Sales on the market. The Short Sale Listings are with homeowners in foreclosure who want to do a Short Sale. You won't have the expense and time involved in marketing.

  The drawbacks are you may not be able to purchase the property as cheaply when a Realtor® is employed because the lender will calculate the Realtor's® commission into their costs. That commission amount will be reflected in the final amount the lender will be willing to accept.

  Another drawback is you, most likely, won't be the one negotiating with the lender. The Realtor® will be the one negotiating.

  You'll need to work with a good Realtor® who specializes in listing Short Sales. Contact us to be connected with a Realtor® in your area.

So, now you have the answer to What Is Short Sale Investing?

If you want more information on whether you really should try to save your home you can find out here.