My group finished its first short sale with a duplex in Sunnyside Terrace in NJ. It was good as my friend who is a loan officer got the lead and another friend who is an investor short saled with the bank. The #s are:
ARV = $220 to $250K
Fixup costs = $40 to $50K
1st lien bank mortgage = $175K as of Feb 2005
Other liens = $12K
Final payoff after short sale: $125K including all closing costs and paying off credit card judgements, taxes, and utility bills.
There were many challenges to this getting done as the title search revealed extra emcumbrances on title among other things. It found things that were paid off but was not dismissed or recorded as satisfied. This made the whole thing drag.
My friend and I agreed to take 25% of the finder's fee. It was flipped to our short sale teacher to rehab and rent or live in. He was going to be paid 50% net of flip value.
We were happy to close and now looking for more short sales. The client even said she was happy and she wanted to know if we would hire her as a paralegal!
It is a good win although a small one. Many are happy including the bank :)
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2 comments:
Hi,
Great report! Just a quick question can you clarify the paragraph "My friend and I agreed to take 25% of the finder's fee. It was flipped to our short sale teacher to rehab and rent or live in. He was going to be paid 50% net of flip value."
Was the "he" who was getting paid your friend? What is the net flip value?
Thanks.
Hello,
Thanks for your msg. It would really help if you leave your email or something for me to reply back to it directly if it is sensitive information.
The deal was that whatever the net profit it would be split for the following ways:
Negotiator - 50%
My Friend who brought the deal - 25%
Me who connected them both and working to learn - 25%
My friend who is a loan officer agreed as we both understood we wanted to learn short sales and see one actually go through. I am a person who likes to have a mentor but there are very few people who are willing to mentor people without any financial compensation. This is due to the fact that the best in the field value their time very much. They can either make more money or train someone else who may become competition.
The net flip value? Are you asking what we made from the deal?
In this deal the buyer who is the negotiator will have this deal at about 79% ARV and under depending on how he rehabs it and the market fluctations. It is a good house close to a bad neighborhood. I do not disclose absolute #s there is no permission from my JV partners to release that information. Suffice to say I made less than 1% of the price of the property that we bought it from the bank. Also the knowledge gained is more than worth it.
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