How To Flip Short Sale Properties

Wholesaling properties, or flipping properties, involves selling a property at wholesale price to another real estate investor. It also the quickest and easiest way to make money in real estate investing.

So can you flip a property negotiated in a short sale with banks to another real estate investor?
This article analyzes the possibilities of flipping short sale properties.

In order to successfully flip properties, your selling price must be higher than your buying price in order to make a profit.

Wholesale real estate investing involves finding greatly discounted properties, then finding a buyer, usually a real estate investor to buy it.

You sell it at a wholesale price because your buyer has to do any repair work needed.

You can make profits from $3000 - $15,000 per deal this way.
If the equity is not enough, you can negotiate with the bank to accept less than the mortgage balance. This is called a short sale.

You must close a short sale property within 30 days.

Let us explore different scenarios:
1) Contract assignment
In order to wholesale a property, you can simply assign a contract to the real estate investor buyer.
In order to do this, your contract needs the buyer to have "and or assigns". Banks do not allow this clause, so this method is out if you are doing a short sale.

2) Simultaneous closing
You can also buy the property, then sell it to your buyer at the same time in a double closing, or simultaneous closing.

The difference between your buying price and your selling price is your profit.
You can use the money from your buyer to close the first transaction, then use it to close the second transaction. Most hard money lenders never used to have a problem with this. Most of them do not accept this any more.

Also, most banks no longer allow you to use your buyer's cash to close the first transaction. This means you must have the money to close it.
Hard money lenders also offer transactional funding, used for just closing the first transaction, making this transaction possible.

3) Seasoning issues
Lately, if you negotiate a short sale, more and more banks are now requiring that you hold the property for at least 30 days before you sell it.
Meaning you can finance your purchase with a hard money loan and sell the property 30 days later. Of course you must consider your closing and holding costs in this transaction.

Lots of deals will be eliminated by this clause unfortunately. A deal making you a profit of $3000 - $5000 is most likely eliminated. You would have to focus on higher dollar properties to make this work.

Successful real estate investing must be driven by a ready supply of private cash available from private money lenders. Targeting these lenders requires you convince them that their money is safely invested in your deals. Learn how you can attract investing cash through a private money website from http://www.realestateinvestorswebsites.net/website-types/private-money-website.php