Short-Sale Pre-Foreclosure Investing

Dwan Bent-Twyford, "The Queen of Short Sales," is the country's leading authority on buying pre-foreclosure properties directly from lenders. She also leads popular boot camps for real estate investors. Sharon Restrepo is known as "Short Sale Sharon" and specializes in buying foreclosure and distressed properties. She is the coauthor of numerous real estate home study courses, offers training workshops, and is cofounder of several real estate companies.

Downloadable Forms ix

Acknowledgments xi

Introduction xiii

Chapter 1 Get Motivated, Set Goals, Get Started 1

A Short-Sale Case Study—with a $200,000 Profit 2

Getting Motivated 6

Setting Goals 7

Accomplishing Your Goals 9

This Is a Business, Not a Hobby 10

Dealing with Naysayers 10

Personal Appearance 12

Setting Up Your Office 13

Structuring Your Business 14

Ready to Do Business 16

Chapter 2 What Is a Short-Sale? An Executive Summary of How to Negotiate with the Bank and the Homeowner 19

Why Do I Need to Do a Short-Sale? 20

Why Do Banks Accept Short-Sales? 21

How Much Do You Offer the Bank? 23

Successful Short-Sales Start with the Homeowner 33

Financial Agreement with the Homeowners 33

How Much Should You Pay the Homeowner to Move? 35

Setting the Move-Out Date 36

Chapter 3 Expert Strategies for Finding Distressed Properties and Foreclosures 39

Buying Bank-Owned Properties for Pennies on the Dollar 39

Newspaper Ads 43

“I Buy Houses for Cash" Street Signs 44

Networking 44

Postcards 45

Magnetic Vehicle Signs 45

Bail Bondsmen 46

Pawnshops 46

More Deal-Finding Favorites 49

Chapter 4 How to Approach the Homeowners and Create a Win-Win Solution 51

Understanding Why Homeowners Want to Work with You 52

Building Courage to Knock on Doors 53

Friendly Negotiations with the Homeowners—What to Say and What You Need from Them 54

Establishing Rapport over the Phone 57

Knock on Doors Like a Pro 57

Helping Homeowners Understand Their Options 59

Deed in Lieu of Foreclosure 64

Chapter 13 Bankruptcy 65

Final Thoughts 65

Chapter 5 Preparing Your First Offer 69

Authorization to Release Information 75

Going to Contract 79

Hardship Letter 88

Pictures 98

Investor Cover Letter 99

Comps That Justify Your Offer 101

Net Sheet 105

Estimated List and Cost of Repairs 107

Chapter 6 How to Approach the Bank 113

How to Get the Bank Interested in Talking to You 114

What the Bank Wants from an Investor 114

How to Get Through to a Stonewalling Lender 115

Presenting Your Short-Sale Offer to the Bank 115

The Asset Manager’s Role 119

Working with the Portfolio Representative Directly 121

Getting Your Short-Sale Assigned to a Loss Mitigation Rep 121

Additional Information the Bank May Require 122

My Offer Is Submitted—Now What? 127

Chapter 7 Negotiating with a Second or Third Mortgage Holder 131

Your Conversation with the Second Lender 136

Variations on a Theme 139

Chapter 8 Key Elements of the Legal Process You Must Understand 145

Understanding Ownership versus Debt 146

Foreclosure Process 149

Types of Liens 152

Types of Mortgages and Loans 155

Chapter 9 When the Bank Says Yes 159

How Do I Buy More Time? 162

How Does the Homeowner Buy More Time? 163

Chapter 10 Three Profit-Making Exit Strategies: Wholesaling, Rehabbing, and Renting 169

The Wholesale Path 170

The Rehab Path 173

Selling the Home 180

The Rental Path 180

Chapter 11 Setting the Closing Date and Making Sure the Closing Goes Smoothly 183

A Successful Closing 185

What If My Homeowners Change Their Minds? 186

What If My Buyers Change Their Minds? 189

Closing with the Assignment of Contract 191

Double or Simultaneous Closings 196

Are Double Closings Illegal? 198

Chapter 12 First-Year Expectations 201

How You Can Become Rich without Going to College 204

What We Did to Get Here 205

What You Can Expect in Your First Year 207

Thinking Like a Millionaire 208

Index 209