What started out as one simple blog post has now evolved into a full fledged series that keeps growing. I guess our readers, listeners and viewers like it because we keep getting more and more requests for videos.
So if you guys don’t get tired of our mugs, we’ll keep putting them out for you. Barry and I really enjoy it and we love the opportunity to provide all of this free content for you. Stick around, you won’t have to buy any courses, we’ll show you how all of this is done.
I do have to say one thing that’s been bothering me. We are producing our content for those who are interested in making money. I don’t care if you’re an Investor or a Realtor, if you want to learn how to make money in real estate, we are eager to help you. What I am not going to do is apologize for our methods.
Nothing we say is illegal. While some of the info may not be comfortable for Realtors to hear, our methods have allowed us to succeed. I’m not an agent trainer and I gave up a long time ago trying to make agents see the light. So we moved back into our comfort zone and decided to simply focus on making money in this business. We’ll leave the Realtor training to those who have the patience to do so.
One thing I can tell you for sure is that we’re not interested in CONVINCING people that our methods work. We’re not even interested in debating people who have a problem with our methods. You either want to try and implement them or you don’t.
That being said, let’s get to today’s episode which I am sure will ruffle the feathers of some in the Realtor brethren yet again. Today we’re going to show you how we write our contracts for short sale offers.
Please understand, this video is about Short Sale offers only. We use a different contract when we work on REO’s and conventional sales. We’ll get to those in the future but for right now, we’re going to talk to you about our Short Sale contract.
You’ll see how we take a boilerplate real estate contract and craft it into a bulletproof document that ensures our profitability and protection once accepted. Do all of our offers get accepted? Of course not, but we know that the ones that do mean big bucks for us.
So watch the video, let me know what you think and look for the next episode in a few days wherein we show you how we find Cash Buyers and close one of these deals and re-sell it immediately for some serious coin.
*** Just so you know…this ain’t some quick Youtube video. It’s a full fledged lesson on How To Write A Short Sale Contract. Depending upon the speed of your Internet connection it may take a few minutes to load..maybe 7 seconds or so at the most on a really slow connection. This video was designed to play on fast connections. If you are on dial-up or on a slow connection it may not play for you. The running time on it is about 45 minutes…and no…NOTHING is sold or pitched. It’s all free content ***
Great information (as usual). Thank you.
Thanks James…it was a bit long but we could not really find any way to cram it in to make it shorter
Great stuff! Tel us more on the land trust! How is it set up? How does it work? Do you actually records the offer after execution?
Hi Gus..glad you liked it and sat through it. We’ve got more videos coming and we’re going to get to the trust agreement. And yes, we record notice of the contract. It is imperative that we do. It makes sure that NO ONE can take our deal from us…it also let’s the bank know that they HAVE to deal with us.
Barry and Barry:
Another masterpiece. You guys are doing a great job on the videos and posts. I always look forward to getting them and can’t wait to see, hear or read the next one.
A couple comments on this one: Do you usually let the listing agent/broker submit your short sale package to the lender on your behalf or do you insist on getting authorization (LOA) signed by the seller and directly contact the bank yourself, and by doing so, having the listing agent step aside and let you earn their commission for them?
Also, I know that both of you and I are seasoned veterans, I’ve been in this real estate game for 25+ years, but a word of caution should be conveyed to any newbies with reference to clouding a title to prevent “snakes”, (I have another name for them but can’t use it on a public site), from stealing the deal. You might mention/caution that this type of action could have some serious consequences if they ever come across an unhappy seller who wants to take it out on you because their lender did not accept your offer and now they are losing their home to foreclosure. It’s a very good move to protect yourself in a transaction, but could get costly if the “s… hits the fan.”
Again, great job guys and keep up the good work.
Tony
Hi Tony..glad you enjoyed it. We have many more coming. We are having fun with them and trying different things as we go along. I know some people like short videos but we look at ours more like training videos and I just want to make sure that we cover a smuch ground as we can.
We (Barry and I) are not agents. When we do a short sale we look to be in total control. While we have made offers on properties wherein the listing agent takes care of things, it just never works for us. They just don’t have the experience to get the big discounts, nor the motivation to fight with the banks. So we really only do deals wherein we run the whole show from Listing to closing and re-sale. As you may know, my wiofe is an agent and she lists the properties that we bring in thru the marketing, then we handle all negotiations in-house from LOA to the closing and if need be we bring in our attorney to do whatever work is necessary on behalf of the seller (we cover costs) to make sure that the foreclosure sale does not happen while we are waiting for the payoff from the bank.
You mention commission. Commission is earned for the sale of the property by the agent..not for the negotiation of the payoff from the bank.
As for the Notice of Interest you are absolutely right. It must be used in a very correct manner. Ours is always bullet proof because it is by contract and not held beyond contract. If we for any reason can’t get it done, It is removed immediately if we cancel or terminate the contract. Clouding title can be a tricky thing and the use of said document definitely does require advance investing skills and is not for the “newbie” to effect without knowing how to use it.
I agree with your point there.
Hey Barry:
Thanks for the quick response. I been following you guys long enough to know that I already knew the answers to my questions, but just wanted to clarify for anyone reading the posts. I hope the comments help any new investors and gets them started on the right foot in this very lucrative and profitable business we are in.
Keep up the good work. You guys are AWESOME…!!!
Tony
P.S. Over the last couple of years I’ve sent several investors from up here to Robins site. She also does a great job. You should be very proud of her, or should I say, she should be very proud of you…!!! GREAT TEAMWORK.
Thanks Tony…we are a bit opinionated (now there’s an understatement) but it’s because we are passionate about the business. I’ll let Rob know..thanks
“This offer shall be null and void if submitted to any lender or mortgage holder .. prior to seller execution” is an awesome clause! I hate when agents do that. Why didn’t I ever think of that?!
Hi Friendship Props!
Thanks for the comment and for stopping by.
After all of the shenanigans that we kept running into, we had to find some way of controlling the deal from agents who don’t know what they are doing, so we have been using that clause and it seems to be working…at least for the ones who actually read it.
Most of the time when a bank sends you the Shortsale approval letter, it comes restricted to the buyer’s name. It means only the buyer can close, even when the contract was legally assigned to somebody else. How do you handle that issue with the bank, have you had any bad experience or do you have an important tip to give?
If you have a Buyer waiting to buy the property from you then all you need to do is do a LEGAL double close. Close in the name on the contract and immediately re-sell to your buyer. Even if there is a seasoning requirement this can be done. Some banks like BOA put a 30 day restriction on the flip but as long as you have a cash buyer ready to buy from you, your golden.
You Guys Rock!!!!!
Thanks Michelle… Great hearing from you!
Excellent! How do I see the next video!! Where is video #195? How to fund and sell to the end buyer?
Thanks for stopping by Charmaine! Barry and I are recording a bunch of videos. So hold on they are on the way!
Great stuff!!!
I like the hold hostage if un permitted work. I’m just unsure how to do it so that it doesn’t backfire on you. If you’ve got a 6/4 and the county says it’s a 3/2… How do you hold it over the banks head, yet not have to eat the redoing of the 3/2 that was un permited? Amazingly they lent on the 6/4 although the whole time the county has a 3/2…
I heard one of you say get it “abated”?!? if you can touch on how to use this unpermited against the bank yet get out of it once you’ve wacked the hornet’s nest alerting to it… I’d REALLY appreciate it! Thanks Guys!
Hi Mike..and thanks for stopping by and for your comment.
Finding un-permitted work and disclosing that to the bank in a short sale can be an absolute goldmine. Here’s why. We essentially use the Realtor’s COE against them Meaning now they have to disclose a material fact to all other potential buyers. Well we know of one potential Buyer who may not want that property and may have an incentive to dump it now instead of having to deal with it later. That party being the Bank.
You see , her ein Florida municipal liens and code violations survive foreclosure and the new buyer inherits them. Whether it’s an REO or not. So if the Building Department or some other entity gets wind of a structure’s default, they could indeed slap a lien or fine on the property. We know of some properties down here that have liens running in the amount of $500.00 or more PER DAY. We know of one agent who was surprised when we offered him $100.00 for a house. He called us ranting and raving over the offer being an insult.
We asked him if he knew about the $250,000 in open fines running on his $60,000 house! He told us we were full of it and hung up on us. Segue 2 months into the future, his listing now sits, he has no idea what to do with it, has written into his listing that the fines are the responsibility of the new Buyer…and will never sell this property. So guess who will get stuck with the fines..the bank..and they will try to sell it as is and more than likley it will have to be torn down because it can’t be sold until the problems are rectified.
So back to Mr. No Nothing agent, if he took our offer, we would buy the house, stop the foreclosure, perform the necessary reparations that the City would want and then apply for an abatement.
While it’s unlikely that the City will completely wipe the fines, in our experience, if they see you are doing the right thing they are very accomodating..especially if you are improving the neighborhoow. So if we bought it for $100.00 and spent $15k fixing it up and gave the city $15k for an abatement, we’d be into it for $30k, we’d sell it tomorrow for $60k and we’d make a pile of cash, the homeowner would be out from under the mess and the bank would not inherit a bombshell.
But alas, it will NEVER happen because Mr. No Nothing agent hasn’t a clue as to what needs to be done or how to do it.
As it is our business to create profit and make sure that it is realized…that’s how we do it.
WOW! frikken unbelievable answer! Thank you Barry- you are the GENIUS!
In another angle… could the investor point out the ticking time bomb which is the un-permitted work. And justify your fair offer to the foreclosing lender, in light of that fact? (without the repair) And say something like it’s amazing County/City haven’t found out about this…. And ‘a shame’ for you (the Lender) if they did.
Do you ever see it held over them, or have a veiled threat that if they didn’t take the short sale offer -that the county might be notified…
In other words: Do you have to blow the whistle with the county/city, in order to use this?
Because in this case fully 1/2 the home looks like it’s un-permitted. And ironically 3 lenders have loaned money out (over the years) without ever checking the county records. (yes 650K has been loaned out (currently) and 285K is the offer. If the Buyer could get it for a fair price and keep it, they would be happy. It’s in Florida.
Your thoughts? (and thanks again!)
Thanks Mike..I wish that I could claim genius but I can’t. I was fortunate to have a real knowledgeable mentor who showed me the ins and outs of making money in real estate that most people would never know. He’s my mentor and it’s amazing the knowledge he has provided.
Your question is a good idea but the problem is in a short sale, the owner still owns the house. The deal could still be done and we would include the info in our package..but alas you need the owner to sign the deal and then you need the listing agent to move out of the way to get your deal done. That’s why we have been targeting homeowners direct as of late because the Realtors are absolutely stymied byt this stuff.
Have we ever contacted the County? Well if it is a health hazard like an un-fenced pool or occupants living in the home while siphoning running water from a sewage retention pond because they did not have running water or even a sewer hook-up…sometimes it requires a call to be made. Please understand..we’re not THREATENING anybody. These are REAL problems that have to be dealt with.
By the way, we’ve even used the permit issue to obtain significant reductions on homes on conventional deals. If you’ve read our stuff you know we always do our research BEFORE we even make an offer so we’ll be able to know what’s up before we even visit a house.
For instance if we check the permit history of a house and there’s no permits pulled in the last 10 years, then we see the listing says beautifully renovate kitchen or 3rd bathroom or all of a sudden it’s now a 4th bedroom where the garage used to be..we simply include on simple sentenc ein our offer under the special clauses.
“Seller warrants that all improvements to the property have been permitted and approved by the governing municipality, regardless of whether such improvements were completed prior to the current Seller’s term of ownership or not, or will be by closing. If improvements were not properly permitted, then this Contract’s closing date shall be extended until such time that all improvements to the property have been properly permitted and approved by the governing municipality”.
I can’t tell you how many times people have signed our contract with that clause in it. Obviously you know what happens down the road… Is it a trick? I look at it as doing your homework and knowing where your opponent’s weaknesses are. Most of the time I can count on the weakness being the listing agent not having a clue what the wording means and in their eagerness to get their commission…they have the Seller sign it and all of a sudden the beartrap slaps shut!
As for the deal you are referring to please understand that I’m not talking about a property being financeable..I’m talking about exposing problems so I can get a reduction on the purchase price of short sale approval.
If the Buyer wants to buy a home that they know may be problematic, they can obviously do so. As long as they know what they are inheriting. So if they are getting a great deal..and want to use a bit more leverage and then move in then it’s up to the Buyer. Just remember the sword cuts both ways once exposed.
So be careful and know your objectives.
Thank you Barry-
Warmly and sincerely, thank you. It’s not often the ‘stars of the show’ will spend such generous time answering a question. I appreciate it. I’ll have to find out when you are in Palm Beach Gardens and buy you a beer or two at the yard house -in thanks.
Thanks again.
P.S. It blows me away about lenders lending and no one catching this lots of money lent out on this with a huge liability…
No worries Mike…just trying to help others make money. We have tuahgt this for years to Realtors but I think they find it too dirty or underhanded…when the truth of the matter is it’s there for the world to see. Liens, code violations and fines are a matter of public record. You just have to be willing to look and know how to use the information that you find. I don’t look to hurt anybody..I just use it as leverage so that I can get the best deal possible. It’s amazing how many people get ticked off with me..then I always ask..why didn’t you disclose this to me from the beginning. So who actually had the alterior motive?
Most people, lenders or agents don’t know how to even get this info.
Now I’m going to take it a step further and really blow your mind. Some times we buy the liens or judgments at a substantial discount and get paid the face amount of the judgment at closing….I’ll let you chew on that one but the money left on the table is mind blowing!
Thanks again guys u have done it again, so much valuable information without the fluff. Please put together a VIDEO ON HOW TO PUT REAL ESTATE IN TRUSTS. Thanks again……
can u provide the links to the two previous videos u mentioned, marketing and aquiring