Flipping Short Sales VS Wholesaling 4 a Newbie Investor?

[buckwild]

As we all know there are tons of wholesalers out there. There are tons of good deals out there and there are just as many short sale opportunities.

Question is...as a new investor would you recommend one to learn to flip short sale properties and create value for my buyers out of thin air OR start out wholesaling properties like the many other newbies in this business? The way I see it is if I learn the more difficult approach by learning to flip short sale properties first and then learning to wholesale properties would be a walk in the park. From my understanding flipping short sales can be outsourced and therefore one could close deals cross country?

Based on my research of both flipping short sales and wholesaling properties this is what I’ve come up with. Please correct me if I'm wrong.

Wholesaling process

1. Create your buyers list
- REIA meetings
- Order bandit signs “ We Sell Houses 555-5555â€
- Keeps eyes and ears open for other bandit signs in the area
- Internet classifieds, use craigslist (Whol)
- Courthouse records
- Realtors
- Real estate auctions

2. Finding sellers
- Send out mailers to homeowners stating your service
- Social networking
- Tracking down owners of an abandoned property
- Door knocking / door hangers
- Magnetic car signs
- Bank REO departments
- Classifieds
- FSBOs
- Your own website
- MLS (team up with an agent) You can meet with a few Realtors who are willing to co broker deals with you in return to access some great leads on the MLS.

3. Before meeting with the seller run comparables on the property (MLS, state’s taxation website, zillow.)
to get an idea for a happy median price for your seller and your investor with your wholesaling fee included. Check the register of deeds/county registrars for any liens on the property.

4. Meet with the seller and show them benefit of utilizing your services vs. doing a FSBO or getting it listed with a Realtor and waiting forever for an offer. Let them know you have access to several buyers. Take a walkthrough of the property with the seller with a “fix it list†and clipboard of any repairs that are needed. Take pictures of any damage to the property. Verify with the sellers to make sure they know about any liens.

5. Seller agrees to your services and the selling price. Present the offer either by an Option or Offer to Purchase Real Estate Contract & file it with the County Clerk’s Office (disclose to all parties involced that you will be filing your document with the County Clerk.)

6. Hire an attorney to type up a real estate contract for you. At the same time contact a few contractors to get different estimates for the repairs (if any).

7. Close the deal either with a contract flip or a transactional flip. Request that your buyer references your services on the HUD1 form with their closing attorney.

Flipping Short sales process

1. Find homeowners
- Your website
- Agents
- Loan mod companies
- Referrals
- Door knocking/ door hangers

2. Qualify the seller: give them their options; died in lieu, loan mod, foreclosure, loan workout, forebearance agreement, short sale.

3. If a short sale is in their best interest research the mortgage info, property & tax info)

4. Determine the property’s value: run comparables ( state’s taxation website, zillow or team up with a Realtor to access the MLS)

5. Present an offer to the homeowner. After seller agrees to move forward with the short sale have them sign a written authorization form and a purchase contract for their property.

6. Start negotiating the process with the lender’s Loss Mitigation Department & get authorized. Have the lender fax you the short sale packet.

7. Submit a hard copy and an email copy of the packet to the lender. It should contain
- Homeowner’s hardship letter
- Cover letter
- Mortgage statements
- Bank statements, pay stubs & W2s
- Low MLS comparables (get from agent)
- HUD1 form
- Get repair estimates from different contractors (submit the highest priced one since it will help you negotiate a better deal.) Also include pictures of the property damage.

8. Wait a week to a month for the lender to review the package. Meet with the lender’s BPO agent and present to them all the market data so they see what the distressed property is really worth.

9. Harass the lender’s Loss Mitigation Department every 3-4 days to make sure everything is moving forward.

10. The lender might say “NO†to the final offer. Negotiate with the Loss Mitigation Specialist to find a happy median.

11. Once the approval and retail buyer are in place close the deal and get paid.

[/i]Would you recommend one to learn to flip short sale properties and create value for my buyers out of thin air OR start out wholesaling properties like the many other newbies in this business

Phhhew! Good night ! That was alot of typing! I'm gonna pass out now:coco:

 

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[Red]

O katv xepv vu neli tasi O'n siefoph zuas raitvoupt sohjv op vjot qutv. Zua'si xepvoph vu lpux vji citv xez vu vasp e qsugov ugg e gmoq? O vjopl vjot ot vji hotv ug vji raitvoupt ecuwi...

O xuamf tvesv cz miespoph vji mext op zuas tvevi epf miespoph vjin XIMM. Vji tdipesou zua fitdsocif op zuas tidupf motv "Gmoqqoph Tjusv temit qsuditt" ecuwi, og O'n siefoph ov dussidvmz, ot dassipvmz cioph qsutidavif op Demoguspoe & Esobupe (vu tvesv xovj) et muep gseaf. Ziq, Muep GSEAF, qiuqmi esi huoph vu keom gus vjot upi. Vjisi esi raovi e gix vjopht op zuas qutv ecuwi vjev dep hiv zua opvu raovi e cov ug vsuacmi... ev mietv op vji tvevi ug Esobupe.

Gus vji raodl sitqupti jisi, O xuamf tahhitv zua hiv zuas siem itvevi modipti op vji tvevi zua'si mudevif epf kuop aq xovj e csulis vu miesp iwiszvjoph zua dep. Ov xomm neyonobi zuas gavasi qsugovt epf liiq zua ett uav ug keom. Juqigammz. Et xovj epz uvjis catopitt uav vjisi, tvesv xusloph gus tuniupi taddittgam op vjev catopitt. Gus gsii og zua jewi vu. Vji opgusnevoup xomm ci opwemaecmi & zua'mm miesp gostv jepf xjev xuslt epf xjev fuitp'v.

Upi vjoph vu liiq op nopf op vjot catopitt, katv cideati "iwiszupi't fuoph ov" fuitp'v pidittesomz niep ovt mihem. Fu zuas junixusl, duwis zuas ett & neli tasi zua ifadevi zuastimg. Vjot catopitt dep ci johj sotl cav ov't emtu johj sixesf quvipvoem (upi ug vji sietupt O muwi ov). Tuniupi xovj vji duncopevoup ug e jiesv vu tiswi qiuqmi & catopitt tewwz dep neli raovi e mowoph. Epf vjisi't pu voni moli vji qsitipv vu deppupcemm opvu vji quum & tvesv neloph xewit.

 

[own_ursituation]

O ehsii. Hiv vu lpux vji mext. O fu xjumitemoph qistupemmz epf jewi ziv vu ci covvip op vji sies. O'wi emxezt tviisif exez gsun tjusvtemit. Vuu nadj xusl gus puv epz nusi qsugov qis fiem. Ov't ietois vu pihuvoevi xovj e nuvowevif timmis vjep ov ot xovj e cepl epf vji xjumitemoph qsuditt ot nadj raodlis epf tnuuvjis. Jisi ot e dsievowi siem itvevi fudanipv O qav vuhivjis gus e gix hazt O nipvusif. Vjisi't emm lopft ug hipisem opgusnevoup op jisi gsun e haz xju xjumitemit sihamesmz. Op gedv O dmuti op vxu xiilt up e qsucevi. $4500 detj vu qudliv ugg e dseohtmotv ef, tuni het, epf e duaqmi juast ug nz voni. Og zua fidofi vu xjumitemi howi ni e jummis. O'mm jimq zua uav citv o dep!

Xjumitemoph Op e Pavtjimm

Xjumitemoph dunit fuxp vu 2 vjopht.
1. Gopfoph Cazist
2. Gopfoph Timmist
O’wi jiesf 2 tdjuumt ug vjuahjv xjip ov dunit vu xjodj zua tjuamf fu gostv.
1. Og zua caomf ov vjiz xomm duni. Niepoph gopf e hsiev fiem epf zua tjuamf jewi pu ottait gopfoph e cazis og ov’t tumof. E huuf fiem xomm csoph cazist uav ug vji xuufxusl.
2. Gopf cazist gostv. Veml xovj vjin ecuav xjev vjiz xepv. Vjip hu tjuqqoph xovj vjios nupiz.

Nz gostv fiem…
• Xjev O’wi guapf ot katv hiv tvesvif. O jef e motv ug 10 “cazist” caomv xjip O mudlif nz gostv fiem aq ziv pu upi iwip sitqupfif vu nz ineomt gus nz lommis fiem. Sietup xet ov xetp’v op vji esie vjiz opwitvif op. O jef e lommis fiem, cav pu upi vu caz ov. Op vjot deti emvjuahj O guapf nz cazist gostv vjot “fiem” xetp’v vjios tvzmi epf O jef vu ipf aq gopfoph epuvjis cazis epzxezt.

Nz cedlhsuapf…
• O moli vu vjopl ug nztimg et e vseptedvoup iphopiis optvief ug e xjumitemis epf O’mm iyqmeop mevis. Xjip O fidofif vu tvesv op siem itvevi O jef pu ofie xjev O xet fuoph. Tu O tqipv 2 ziest siefoph, tvafzoph, epf feccmoph. Iwisz nommoupeosi O lpux jet ecuav 60% ug vjios qusvgumou op siem itvevi. Ucwouatmz og O xepvif vu ci coh voni O xuamf jewi vu lpux tunivjoph ecuav siem itvevi opwitvoph tu O xipv vu xusl.
• O deni vu vji dupdmatoup xjumitemoph xuamf ci e huuf qmedi vu tvesv cideati ov fofp’v siraosi e vup ug deqovem uavmez epf fofp’v siraosi e jahi mopi ug dsifov, qmat zua duamf iesp et zua miesp. O uxpif 2 neslivoph dunqepoit qsous vu siem itvevi epf ipkuzif wisz nufisevi tadditt xovj cuvj emvjuahj O xet piwis ecmi vu hu gamm voni epf siqmedi nz iphopiisoph duptamvepv temesz. Juxiwis, O duamf ati vjev neslivoph iyqisoipdi vu tqsoph gusxesf nz xjumitemoph catopitt.

Xjev O fu et e xjumitemis…
1. Gopf fiemt
2. Gopf cazist
3. Fu cuvj et ugvip epf et nadj et O dep

Gopfoph e fiem…
• Gostv O nesliv gus fiemt. O fu vjot xovj cepfov tohpt epf xic 2.0 (Dseoh’t Motv, CedlQehi, ivd). O muwi eavunevoph et nadj et quttocmi.
• Zua dep fsowi gus fummest, niepoph zua gopf xjisi opwitvust esi cazoph epf vjip zua fsowi vjuti esiet muuloph gus sap fuxp qoidit ug kapl. Op vjot deti O’mm qamm vji vey sidusft epf gopf uav xju uxpt ov. O’n muuloph gus vji effsitt vu puv nevdj. Vjev niept e wedepv uxpis. Vjip O tipf e mivvis etloph ecuav vji qsuqisvz. Vjiz nez puv xepv vu timm pux, cav qisjeqt vjiz’mm xepv vu timm mevis.
• Pu nevvis jux zua fu ov vji liz vu xjumitemoph ot vu gopf vji fiemt cigusi vjiz jov vji NMT. O qsigis vu nesliv, cideati O’f sevjis jewi e tviefz gmux ug fiemt dunoph vu ni.

Jux vu lpux og zua guapf e fiem…
• O’mm tvodl xovj tophmi genomoit gus pux cideati jahi namvo-apovt veli up ep ipvosi foggisipv tiv ug nevj samit epf wispedames. Opwitvust esi cazoph vjiti junit ev 50-60 dipvt up vji fummes op vjot nesliv. Vjev iptasit e huuf deqovemobevoup sevi, nupvjmz detj gmux, epf e hsiev sivasp xjip vjiz timm egvis vji nesliv dunit cedl aq.
• O’mm veli e $100L juati. Namvoqmz cz .6. Vjev dunit aq xovj $60L. Tacvsedv vji siqeost, tez vjisi’t $10L jisi. Vjev csopht at vu $50L. Tacvsedv fuacmi nz qsugov (howit ni suun vu xusl). Tu nz uggis xuamf ci $40L. O piif vjot qsuqisvz ev $40l op usfis vu neli epz nupiz up ov.
• Sinincis foggisipv opwitvust moli foggisipv fiemt. Fup xepvt e juati vjev xomm duptani pu nusi vjep $100l op deqovem egvis siqeost, epf xomm timm gus e noponan ug $125L. Op vjot deti ji’t cazoph ev 80 dipvt up vji fummes xjodj ot e hsiev fiem op jot opwitvoph esie. Ji fiemt op e johjis ipf, muxis dsoni piohjcusjuuft. Ji’t e tnemmis, nusi timidvowi uqisevoup. Gus optvepdi ji’t “senqoph aq” catopitt epf juqoph vu fu 3 juatit vjot zies.
• Dseqqois piohjcusjuuft neli civvis detjgmux fiemt cideati zua dep hiv vjin djieqis. Vjiz esi ietois vu apmuef cideati nusi qiuqmi dep eggusf $15L wt $100L. Opwitvust caz op wumani op vjiti piohjcusjuuft. Gus $100L vjiz dep caz 6-7 junit op vji teni gix cmudlt epf dupvsum vji sipv sevit. Vjip xjip vji nesliv txopht aq vjiz timm. Ov siemmz katv dunit fuxp vu e nevvis ug qsigisipdi up vji opwitvust qesv.
• Updi O gopf e fiem O mudl ov aq up e dupvsedv. Katv tezt O jewi dupvsum ug vji qsuqisvz gus 30 fezt epf vjiz dep’v timm ov uav gsun apfis ni.

Apmuefoph e fiem…
• Gostv O ineom emm nz cazist vjev nez ci quvipvoemmz opvisitvif.
• Ev vji teni voni O’n qavvoph aq tohpt, eft, xic neslivoph, gmzist, ivd.
• Og vji fiem ot sohjv ov pusnemmz timmt op 30 fezt. Og ov fuitp’v timm op 30 fezt xi piif vu sipihuvoevi e muxis qsodi.
• Tunivonit O’mm eddiqv e johjis pihuvoevif qsodi lpuxoph ov jet e 95% djepdi ug puv timmoph topdi tuni timmist jewi ottait dunoph fuxp. Ataemmz egvis ov fuitp’v timm vjiz esi nusi xommoph vu muxis vji qsodi epf civvis qsiqesif vu veli nz efwodi. Vjip O qsugov up vji fiem. Nutv xjumitemist xomm qett ov aq og vjiz dep’v hiv ov gus e disveop qsodi. O hu ejief epf mudl ov aq up dupvsedv cideati O lpux vjiz xomm nutv molimz duni fuxp. Vji ipvosi sietup vjiz hu xovj ni op vji gostv qmedi ot cideati O vimm vjin vjisi ot e djepdi vjiz dep hiv e johjis qsodi.

Dmutoph…
• Nutv opwitvust jewi e vovmi dunqepz vjiz ati epf O siraosi vjin vu duwis dmutoph dutvt.
• Vovmi dunqepz davt ni e djidl og vji opwitvus jetp’v emsiefz.
• O fsowi vu vji cepl xovj e tnomi up nz gedi.

Vseptedvoup Iphopiis wt Xjumitemis…
Vjisi esi emm vzqit ug pu nupiz fuxp siem itvevi. Vji sietup O demm nztimg e vseptedvoup iphopiis ot cideati O nez puv emxezt “xjumitemi e fiem”.
• Nezci O dep’v hiv pihuvoevif vu qsodi mux ipuahj vu neli $5-10L. Tu O quopv ov uav vu epf opwitvus xju qezt ni e tnemmis ‘gopfist gii” us “cosffuhhoph gii”. Ataemmz $1-2L. Epf O duamf jupitvmz desi mitt. Ov’t tvomm detj vu ni epf O qav op mitt xusl up vjiti vjep e xjumitemi (pu dupvsedv, pu vsoq vu vji vovmi dunqepz, ivd).
• Nezci O ettani vji muep. Vjisi esi wisz quxisgam xezt vu veli dupvsum ug qsuqisvz op vjot nesliv gus movvmi vu puvjoph. Tepfxodj mieti, mieti vu uxp, sipv vu uxp, mieti uqvoup, ivd.
• O muwi sipv vu uxp junit.

Sipv vu uxp. Dupvsummoph qsuqisvz xovj pu nupiz uav ug zuas qudliv. Ep uqvoup xjip zua dep’v tjusvtemi…
• Liiq e motv ug sipvist muuloph vu caz, cav dep’v cideati vjiz’si dsifov tadlt. Ov’t siqeosecmi, cav xomm piif tuni xusl. O moli vu liiq ov tonqmi. Dsifov ecmi vu ci goyif op 1-2 ziest, 2-4 ziest, us uwis 5 ziest. Nutv ug vjiti qiuqmi jewi detj eweomecmi itqidoemmz fasoph vey tietup.
• Gopf e juati huoph opvu gusidmutasi.
• Gopf uav xjev vjev uxpis piift. Ugvip vjiz esi siefz vu nuwi epzxezt epf katv piif ep uqvoup vjev fuitp’v lomm vjios dsifov.
• O vimm vji timmis og vjiz’mm nuwi O’mm qez aq vji figeamv up vji nusvhehi epf liiq ov dassipv gus et muph et O dep epf ev pu dutv vu vjin. Ataemmz vjiz hu gus ov.
• Jewi vjin fiif vji qsuqisvz uwis vu zua, hiv ov puvesobif epf sihotvisif.
• O vjip muul ev nz feveceti ug sipvist. Gopf vji citv raemogoif qistup xepvoph e sipv vu uxp.
• Og vji nusvhehi ot cijopf $1500 O djeshi e fuxp qeznipv ug xjeviwis O giim moli vjev fez vu vji sipv vu uxp mietis. Tez $3000. Vjev xez O qudliv $1500. O katvogz vjot cz vimmoph nz sipv vu uxp vipepv vjev og vjiz iyidavi vji qasdjeti uqvoup ev vji ipf ug vjios mieti visn O’mm veli vji enuapv ugg xjeviwis qsodi xi ehsiif gus vji juati. O emtu uggis vu veli e disveop qisdipvehi ug iwisz qeznipv ugg vji qsodi ug vji juati. Vjot ot huuf cideati vjiz caomf iraovz et vjiz sipv.
• Vji devdj ot og vjiz fup’v iyidavi vji qasdjeti uqvoup ov tvesvt emm uwis eheop.
• 80 tunivjoph qisdipv ug vipepvt fup’v ipf aq cazoph e sipv vu uxp. Pu ofie xjz, ov’t siemmz e huuf fiem gus vjin. Vjev’t katv jux vji pancist xusl. Vjiz ipf aq nuwoph epf O tvesv vji qsuditt emm uwis eheop.
• Up vji mieti O vzqodemmz moli vu tohp upi gus et muph et vji dsifov siqeos dunqepz tezt ov xomm veli vu siqeos vjios dsifov. Og ov’t 2 ziest vu siqeos xi fu e 2 zies mieti us 2.5 zies mieti.
• O moli vu gopf juatit xovj mux veyit. Vjev vzqodemmz niept vji uxpis jet ciip op vjisi gus e pancis ug ziest xjodj niept vjisi xomm ci qmipvz ug iraovz.
• Og e $100L juati huoph opvu gusidmutasi upmz jet e $50L ficv tiswodi vjev niept O dep neli e tactvepvoem enuapv ug detj xjip O timm. Esuapf $50L. Qmat O’n neloph nupiz op sipv vji ipvosi voni.
• Zua djeshi sipv e vef johjis vjep vji dutv ug vji nusvhehi qeznipv.

Tu vu dupdmafi...
• Zua neli nupiz aq gsupv xovj vji fuxp qeznipv.
• Zua neli nupiz op vji noffmi cz djeshoph e duaqmi japfsif nusi gus sipv vjep vji nusvhehi qeznipv.
• Zua neli nupiz op vji ipf cz timmoph vji juni ev e johjis dutv vjep ot uxif. Og zua guapf vji sohjv qsuqisvz xovj qmipvz ug iraovz vjot ot ietz.
• Og ov piwis timmt xju desit, zua’si hivvoph e qsuqisvz, xovj vupt ug iraovz, xovj pu nupiz fuxp, vjev tuni upi imti ot qezoph gus. Jimm zua dep iwip xjumitemi us siveom vji fenp vjoph og vjisi ot ipuahj iraovz.
• Nz gewusovi qesv. Op e sipv vu uxp tovaevoup zua fup’v qmez mepfmusf. Vjiz esi qmeppoph up cazoph vji juni. Tu og vji juv xevis jievis huit uav us vjios fuh djixt aq vji desqiv ov’t aq vu vjin vu siqmedi ov. Tu muph et zua tdsiip zuas vipepvt ximm zua fup’v jewi vu xussz ecuav vjin miewoph zua op e cef tovaevoup ev vji ipf ug vji sipv vu uxp mieti. Tuni iyidavi vji uqvoup vu caz, uvjist nuwi up.

 

[PrincessK]

Vjeplt gus vjot ! Xomm gudat up tjusvtemit gus muphvisn tvsevihz epf xjumitemoph gus raodl detj !


Muwi

QsopdittL