Hi All ~

Kenny here...

My short sale criteria for consideration are as follows:
• Market value of $100,000(NV) $300,000(CA,WA) minimum, no maximum
• Higher End Preferred - ie min. $100K above Median Price Range
• Pretty House / Desirable Area - No Ugly Homes/Rehabs
• Multiple mortgages/1st & 2nd with a large 2nd mortgage - preferably same lender
• The seller must be in imminent default
• Sellers must want to sell their home and move on.
• Sellers must be cooperative on the collection of the short sale info required.

In addition, if the above criteria is met than the next part of the evaluation is:
1.  What are the comps?
2.  What in your gut do you feel the house will sell for in 90 days?
3.  Can you sell it?

After looking at a few deals you will really to get to know what fits, however, I will initially look at ALL (i.e. less than $200K) of your or anyone's short sales so you can get a feel for what kind of short sales I want and how I evaluate them.

My Process:
I will purchase the property directly from the homeowner thus my offer will start the short sale process immediately.  You will list the property for me.  And since you are listing the property for me, I can guarantee you a full commission because it isn't subject to the short sale & the lender discounting it.  I will have you start the listing at the top end of the market to show the lender good faith that we are trying to get as much money as possible.  Moreover, to develop a listing history, I will then want you to drop the price by 3-5% every week until we find that end buyer.  The market determines what the house is worth and the listing history will help the lender see this.  By the time we find that end buyer, because of my offer starting the short sale process immediately, a BPO or appraisal has already been ordered by the lender, my offer has been assigned to a negotiator and we're close to getting mutual acceptance.  It's all in the timing.  This significantly shortens the time line on closing the short sale with our end buyer which is a great selling point to an end buyer and buyers agent.  And if we still have no end buyer but we know what the lender/investor wants, the listing can change to "lender verbally approved just need full price offer to move forward for quick closing"

How I finance:
I have several sources that I use.  I primarily use private money and a warehouse line of credit which is used as transactional funding for quick turns.

When I purchase:
I will close on the property when I have an end buyer regardless if there is any profit or not.  I realize as an investor not every deal will have a spread and my primary purpose is to stop the foreclosure for the homeowner & close the deal.  i.e. If the banks BPO is too high or the investor who owns the loans is unreasonable regardless of the stats we have to justify my offer and we have an end buyer with a price they will accept, I will close directly from seller to new buyer and you still get paid.  Typically I get paid directly by the lender or through seller concessions or a combination of both.  If in the slim chance neither of these options happen, I will then ask the agents involved for a small consideration ($500 ea) for working hard to close the transaction.  This would be the only time I would ask for this.  If I am able to make a profit via a resell the agents will get their full commission and depending on the spread I will give a bonus which potentially could be an extra 1-3% for a total of 7-9% commission if you also find the buyer.  I don't ask for a submission fee or a portion of your commission to negotiate as you are finding with "negotiation service companies".  I find a lot of these companies are glorified "loan processors" with no finance & negotiating skills and they don't know how to justify offers hence the poor success rate.

 

 

My spending cap:
I don't have one.  Regardless of the price point a short sale is a short sale and I find that lenders seem to be more willing to get the higher loan amounts off the books.  I not only do Residential but also Commercial.

 

Who is the buyer:
I, or an Investor, is the purchaser of these homes.  I am affiliated with a group of professional short sale investors.  We don't buy short sales together per se.  We meet regularly via teleconference (as we're throughout the U.S.) on strategies and best practices to complete successful transactions as the landscape is constantly changing and this is why I am good at what I do.  I am not interested in holding any property (especially in this market) so I am not interested in holding any notes et al.  I first started investing in 1989 in the Seattle area with "The Investors Edge", a foreclosure newsletter group, and I have done the rehab & landlord thing and it's not for me.

What is my market:
My market is WA, CA, NV, AZ & FL although I am always open to other markets provided I have a GREAT Realtor partner who knows their market.  I currently have active short sales under contract in NV, WA, & CA.

To wrap it up:

·   No fees or costs of any kind to you the Realtor or the seller in default
·   We will purchase the home & our attorney starts the negotiations immediately unless you want to handle the negotiations
·   You get your full listing commission when we close
·   Our attorney negotiates with our offer - it saves time; increases success rate (again unless you want to handle this)
·   You as the Realtor will retain the listing and your client
·   No more long phone calls and frustrations dealing with loss mitigation

In other words…
- We will purchase the property.
- We do the short sale negotiations via our attorney
- You list and sell the property.

What's In It For You:
You have the potential for more commissions - up to 9% total including a bonus.

It’s that simple!

 

You get to do what you do best:
·   Find Sellers
·   Find Buyers
·   Market and List properties

I make money when I buy distressed short sales, create equity with the lender and then resell to an end buyer.

It's win-win for everyone.

Another way to look at this is in this way:
If it takes you 25 hours to sell a home for a $12,000 commission, then your hourly rate is $480 per hour.  If you were to also handle all the other aspects of the short sale including the negotiations and that took an additional 25 hours, your hourly rate would then drop by 50% to $240 per hour not to mention that you've taken time away from marketing and getting more listings which is hard to put a price on.  I'm looking for a Realtor partner who understands the value of individual expertise, segmentation of duties and equitable partnerships to accomplish more.

Should we work together, I will provide you with all my short sale documents for you to use when contracting the homeowner/seller.

I hope I've answered your questions and that this email helps you understand a little more about how we would work together.

Here's to good things for 2011 and beyond!

Best,

Kenny