Friday, March 31st, 2017

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3 New Rules for Crushing Short Sales in 2010

Editor’s Note: I’ve updated this post with Shaun’s answers to the questions you left in the comments on on our recent webinar.  See a little further down below…

Before we get to the rules, here are three truisms about real estate investing in 2010, I’m sure you’ll agree…

1) Things ain’t like they used to be (I know, understatement of the year, right?)

2) The only thing consistent about this market is inconsistency (constantly moving & shifting)

3) In terms of raw, cash-getting, deal-making opportunity, short sales and REOs rule the day.

So the other day I was chatting with one of my favorite short sale dudes and bestest friend, Shaun “the swan” McCloskey.  He does quite well cranking deals out of a number of different U.S. markets right now.  So I popped this interesting “new market” question on him…

“In your humble opinion, ‘Swan’, what are the 2 or 3 biggest, most important things every investor should know about how to crush it in short sale deals in 2010?”

After pausing only a moment, he spouted off three really solid rules everyone should be aware of and paying attention to right now.  So then I hit the record button and asked him to say it all over again.  😉  You’re welcome.

And now, for your listening and learning pleasure, I proudly bring you…Shaun’s 3 Rules for Crushing Short Sales in 2010

Press play and listen…

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A Few Tasty Morsels From Our 12-ish Minute Chat…

  • Why homeowners aren’t reacting as strongly right now (they feel the government is likely to come bail them out)…
  • Why eliminating the likely “dead weight” deals up front is more important now than ever…
  • Deal Volume Vs. Deal Quality: Which is better in 2010?…
  • The awesomeness of what you can accomplish right now with really agressive offers…
  • The trend of what banks are willing to accept right now (and how interest rates play into that)…
  • Why price is more important than EVER right now…
  • Shaun sells about 90% of his houses in 14 days or less (involves the MLS, plus some really creative auction stuff you’ve probably never heard of before)…

“For the Record, Who Is This ‘Swan’?”

For what it’s worth, and in case you don’t know already…

Shaun’s one of the top short sale dealmakers around

He makes out like a bandit actively doing deals, right now in this market

He’s got a unique perspective on the nationwide market (because he’s involved in deals all over the U.S.)

has MUCH OF VALUE to say about how to make it big in the 2010 short sale arena

is one of my bestest friends on the planet 🙂

is ultra sophisticated and would never be caught dead, playing a fool, wearing a tiny pirate hat.

And Now, 2 Questions For You…

In response to all this, here’s your quick assignment: In the comments below, please share real quick:

1) What’s your biggest, baddest question(s) about making great money doing short sale deals in 2010?

2) What are your biggest FEARS right now about doing great short sale deals in 2010?

In return, my promise to you is that, one way or another, I’ll make sure Shaun answers EVERY one of the questions you guys drop below in the next week or so.  Sound fair?  He’s a friend, so I can pull a favor or two. 😉  So let’s hear it!

UPDATE: In follow-up to this post and to my awesome webcast with Shaun, I got him on the phone for a few minutes to get specific answers to your questions and challenges.  Got some good, solid stuff inside – dealing with both the questions you see in the comments below this post, as well as a number of unanswered questions we couldn’t quite squeeze into our webcast.  So here you go…learn and enjoy…

Q&A with Shaun, Pt 1 (14:22)

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Q&A with Shaun, Pt 2 (13:16)

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Q&A with Shaun, Pt 3 (15:44)

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PS – Many smart and sexy people have realized that hitting the “Facebook Like” button on this page gets you free promotion. 😉

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About 

JP Moses is a roughly-hewn man-child who first got into REI after reading Rich Dad, Poor Dad back in Y2K and went full time in 2002. He's tinkered in everything from landlording to short sales to rehabs to Realtoring to REOs to notes to owner financing, blah, blah, blah...Till he finally stuck his flag deep into wholesaling and has since flipped somewhere north of a couple hundred deals.

JP's not a “guru” but also doesn't think it's a bad word. Among his core values are authenticity, creativity, big honkin' value, general fun-ness and being unshaven. He's super proud to be chief blogger guy at REItips.com and host of the free REIology podcast. He also thoroughly enjoys sharing his 53 best real estate investing forms with anyone who wants them. You should totally check that out. :-)

  • Lee Blunt

    This is an MLS SS listed propert and I’d like to wholesale this deal. Is there a way around Bank of America’s rule that new buyer must wait 31 days after closing before reselling for a profit?
    Thanks,
    Lee Blunt

  • Rthedderly

    How do you find your buyers for the high end rsidential deals over $500,000. My biggest fear is to get a contract accepted and not have a buyer. I looked at a property today, REO, in a $900,000 neighborhood, a $1.7M home next door with pool and sport court, bankm bought this back for $513,000. I want to but it, put $15,000 in 3 balconies that are rotted and need replaced. new carpet for Master, other carpets cleaned, hardwood buffed and shined, and lots of landscaping, weeds etc need pulled and groomed. Total cost $25,000, but how do you find end buyer w/o listing in MLS?

  • Ron

    Should I let my daughter and her 3 kids move back into my defauled house to maintain it till a buyer closes on it?
    The senior TD accepted a short sale and hopefully so will the junior TD, who got it from the junior TD owner that I defaulted with.
    She used to live in it but couldn’t keep up with the expense and moved to a home where a family rented her part of their house (1bd/1bth). Now she has storage to pay as well as rent.
    She is a school worker so she gets no pay in summer and her first check is spent before it comes next month. Meantime the big (3bd/2bth) house of mine hasn’t been kept up and the yards need work, to show buyers.
    An offer by an investor has already been turned down by the bank for being too low.
    I bought it for $355k in 2007, now I owed $360k and it’s for sale at $160k. I guess they offered less.
    What are the odds she moves in and gets it presentable and a month later she has to move out for a new buyer. Her incentive will be against that if she has nowhere so comfortable to go to.
    I still have my name on it but I think it is partially an REO.
    What affect will a house-sitter have on the decision of the 2nd TD to accept my short sale?
    On the other hand it may sit for months empty while she is hurting.

  • Amadee’ R Garibaldi, Sr

    Hi Shaun:
    How can we do Business? I’d like a real partner whose not selling programs but whose looking for good deals especially luxury short sales.

    Amadee’ R. Garibaldi, Sr

  • Great insight. Money to be made in Every market…

  • Mike

    I bought a short sale and rehabbed the house and made ready to sell. I am looking at huge taxes on this as a flip house. How do I save in this area? Is there a way to turn this sale so I am looking at only capital gains tax and not regular income tax? This is my first flip and this tax thing has got me rethinking this whole game, or am I missing something? Thanks for any response.

  • Angie

    I would like to know any answers to this as well.

  • Shaun is great at short sales and has plenty of great advice to give. Thanks for the great post.

  • Blue Business

    Hey JP, Ive been listening to Shaun’s stuff AND the questions and comments (obviously). I recently came across a short sale “deal”. I really would love to tackle it myself but am NOT experienced at all. I wanted to let someone else handle it and split the profit with them. Is there a form that will allow us to collaborate or efforts and that will ensure that I get screwed? And that brings me to my next question… how would I be able to work with you or Shaun on deals that I come across

  • I’m wondering if you do your flips from within a self directed IRA, if that will bypass (or at least delay) some of the taxes.

    Jay von Mohr
    Lancaster, CA

  • A lot of people continue to live in the property while it’s being negotiated for short sale. The problem is timing. She could move in & then an offer is accepted at any time & she has to move out soon.

    I think it’s better that someone lives in the property to maintain it & so it’s not vacant (crime factor & it gets run down looking). When our company does short sales, we have a cash buyer so we wait out the process till the lenders wise up about taking our offer or foreclosing. I feel it’s better to have someone living there for us, the banks & the neighbors.

    Jay von Mohr
    Lancaster, CA

  • Make sure of your rehab costs up front. Remember that high end houses require everything be high end (expensive), especially to move quickly in this market. Think about the total size of the property when calculating repairs per sq ft. Also add in estimated holding costs till it sells.

    As far as buyers, you should ideally build your buyers list now. If you can access the MLS, lookup who is buying those type properties in that area during the last 90 days, then contact them. You’re best bet might be to just wholesale it to a cash buyer & let them do all the heavy lifting.

    Other than that, I know DC Faucet (name spelling?) was partnering up with people on high priced short sale deals. I think he charged to join his group.

    Hope that helps,

    Jay von Mohr
    Lancaster, CA