Short Sale Deals Part II: 3 Ways To Find...

nope Are you ready to get into short sales, but just aren’t sure how to connect with property owners and close the deal?

Hi, Moguls, Jason Lucchesi here, welcoming you to Part II of Short Sale Deals. In Part I we talked about the way short sales used to be done, why they changed and how they’re done now. If you missed it, make sure to check it out.

In Part I, we also talked about finding short sales on the MLS through a real estate agent. But then what?

Well, here in Part II we’re going to talk about how to contact these distressed property owners, plus we’ll cover a few tips and tricks to build a booming short sale business.

Let’s get to it…

1. Call Them Up

The first method I would recommend is a phone call. Do a skip trace with a site like Spokeo or TLO to get the property owner’s direct contact information.

Now, keep your potential seller in mind. You’re looking for individuals who have recently been served a notice of default or lis pendens. That means these individuals are at least 90 days, or 3 payments, behind. Think about that as you decide how to contact these individuals and what to say.

They will benefit from hearing from you, so be persistent.

2. Write it Down

In addition to calling, you can either send the property owner a letter or you can use my leave-behind method. When I use this method I create Post-It notes that say:

CALL ME!
My phone number
My name

This is designed to be very short and straightforward. When I do this, I get yellow Post-It notes and stick them right on the door.

If the house looks vacant, don’t leave anything. Instead, mark that address down and do a reverse search on that particular property to see if you can find the owners. Contact them to let them know they don’t have to just let the property go into foreclosure – offer the option of a short sale on the property.

3. Call the Lawyer

Another opportunity to contact owners of distressed properties is to call their attorney. Some attorneys know right off the bat which of their clients are facing difficulty in repaying the mortgage.

lawyer The attorney might tell you Mr. and Mrs. Jane Smith are in financial trouble right now. They have told their attorney they want to file bankruptcy, but their attorney could discuss the possibility of a short sale with them.

A lot of people might be in credit card debt, car loan debt or student loan debt. Then paying a mortgage on top of that is a gigantic load. Work with attorneys to find these individuals and relieve some of that load.

Bonus: 4. Local Wholesalers

A 4^th opportunity is to partner with local wholesalers. Believe it or not, wholesalers want nothing to do with these short sales. That means you could pay them a referral fee to find short sales.

One way to do this is to connect with the individuals who put up the “We buy houses” signs. I typically pay them a 10% referral fee for deals that we do end up closing. So if I make $10,000, they make $1,000 just for sending me that lead.

A lot of property owners do call these wholesalers, but the wholesalers are looking for properties that would allow them to do quick flips. That’s fine—that’s their business model. So referring short sales to you is a win-win.

Best Intentions

With short sales, your business model is to have the real estate agent list it and negotiate while you wait. Your intention should always be to close at the price you put under contract.

Here’s my word of warning: Don’t ever put a deal under contract that you don’t plan on performing on. Once that contract is executed, if the inspection is fine, the appraisal is fine, the title is fine, and then you don't perform, that looks really bad. Legal issues could potentially follow.

I turn it over to a real estate agent because they are licensed and bonded, so I would recommend just having your agent list the property.

intentions And make sure you always have an attorney on your side.

The Exception

Short sales can be a really great venue, even with deed restrictions.

Now I know I said in Part I that you can’t do same-day A to B, B to C transactions. There is actually an exception. You can still do these transactions if the B to C transaction is under 20% of the A to B transaction.

In other words, you can’t sell the property for more than 20% of what you bought it for if you want to do an A to B, B to C transaction.

So…

Now you know how I do short sales. Start implementing these short sale tips within your business immediately. Don't wait. Go out there and make it happen!