Many wonder what the ideal short sale candidate might look like.
With all the different and unique situations that you may run into, here is an example to compare to.
If a potential seller's asking price is the total amount owed between a first and second mortgage together and is several payments behind on both mortgages, and if the After Repairs Value is several thousand about his asking price, then this buyer is a prime candidate for a short sale deal.
You will want to work aggressively to get the second mortgage discounted.
The best rule to go by is to get it down to about 10% of what's owed or so.
With this deal closed, you can leave the first mortgage at the price that the buyer is wanting.
At the same time you get to make that decision, you would consider bringing the first mortgage current.
But this is something that you may not want to do until until after you've purchased and/or paid off the second mortgage.
This is a great procedure to follow.
If you do it this way, you don't have to raise cash to buy the house except for what little bit you're gonna spend on that second mortgage.
In doing this, you've created a lot of equity in the property that didn't have it in there when you bought it.
That's smart thinking.
So instead of shorting the first mortgage, you bring it current.
And this potentially buys you all the time in the world that you need.
Another course of action you have is to put a lease option tenant in there if you want too instead of having to cash out of it.
This can help generate more revenue as you get the house ready to sell.
Not to mention, this opens up owner financing and rent-to-own options as well! There are many unique and different circumstances out there that can prove to be the perfect short sale situation.
This is just one of them.
Short sales are great deals that will help you bring a profit to your investment.
Know all the facts and do all you can to close the perfect deal which will yield the most income!