May, 2010


20
May 10

How to Save Your Home From Foreclosure

The first thing you need to realize is that the lenders are not in the business to own property. They lend money; not properties. They don’t want your home, but if you cannot pay your mortgage, they foreclose on your home to reclaim the money that they loaned to you to purchase that home. As strange as it may sound, this is YOUR leverage against the bank.
The first thing that you need to do if you are behind on your payments is call your bank and ask for the Loss Mitigation Department. This is the department that you will negotiate with to lower your payment, change your interest rate, or simply work out a plan to save your home. Those of you with a fuse that is as short as a paper clip should grab a dictionary and look up the word “patience”; you will need a lot of it! Now that the warm body answered your call, immediately ask for a supervisor. The person that picked up the phone will read from a script and further aggravate you. Once the supervisor is on the phone, make sure they have your account in front of them and simply explain to them that you want to begin the process of saving your home through loan modification, however keep the details to a minimum. This will benefit you in the negotiation process. Let your paperwork do your speaking, as your words will not be documented properly in their computers.

Step2
Now that you have spoken with the loss mitigation department, you will need to get some things together to submit in a package to the lender. These items will consist of your last two years tax returns, last six months bank statements, last three months pay stubs, an income and expense statement, and lastly; a hardship letter. What is a “hardship letter”? This is a letter explaining why you are in the situation that you are in, financially. No matter how embarrassing your situation may seem, I will tell you from my experience assisting in this process; your letter is not the most embarrassing they have seen! (If you only knew!!!)
The more information that you can give the lender concerning your financial situation, the better they will be able to assist you. Please be aware that not every person will be able to obtain a modification to their loan. Due to the financial crisis we are going through here in the United States, a lot of people are, and have been out of work for quite some time. Obviously, if you are not making any money, or your expenses far exceed you income, the lender most likely will not work with you and you might want to consider short selling your home. For more information on short selling your home, feel free to e-mail me at greg@stephenscompanies.com .

Step3
Once you have all of your information together, a cover letter would not hurt, however it is not required. Send this package into the bank and prepare to wait for 30, 60, or maybe even 90 days for any response. My suggestion is to start calling the loss mitigation department every week and ask to speak to your negotiator. This negotiator will be very stern, once they are assigned to your file, but cooperate with them. These negotiators have a lot of files to handle, as you can imagine, so it will benefit you to make sure that you supply anything beyond what I have informed you of.


16
May 10

The Impact of Short Sales And Foreclosures on Your Credit Score

Should you find yourself in a difficult financial situation where you cannot afford to cover your mortgage payments and you no longer have equity in your home, a short sale may be an option to avoid foreclosure on your property. A short sale occurs when a homeowner sells the property for less than it actually sells for. This happens because the outstanding obligations against the property are greater than the true value of the property and therefore the homeowner owes the property more than what the property sells for. If this is your case and you choose to sell your home when the housing market is really slow or you have taken equity loans in addition to your mortgage loan, you may consider attempting a short sale. And if you eligible for this, it means that your lender agrees on accepting selling our property for a lower amount than the outstanding balance on your mortgage.

When the sale is completed, you will still be liable for the difference between the original mortgage and the amount of short sale. For instance, if you originally owe 0,000 on your mortgage, but are only able to sell your property for 0,000, your lender has to agree on attempting a short sale for 0,000. If you find a buyer for 0,000 and your short sale is successfully completed, your deficiency balance is ,000 and this is the amount you are liable for.

Although a short sale is a good alternative instead of letting your bank foreclose, still it affects your credit score. However, the credit implications of a short sale are less than those of a foreclosure. If the short sale occurs voluntarily and not because you are forced by your bank, it means that you are able to pay off the amount you owe by using assets you already own, meaning your property. In other words, you are not asking your bank for a new loan, but you are trying to sell you house even for less. Even if you take a loan to make up for the deficiency balance from the short sale, your credit score won’t be more affected than it would be had you taken any other loan. In fact, it may even improve your credit score as the short sale will not come out as a foreclosure on your credit report.

On the other hand, if the short sale is forced by a foreclosure, your credit score will be severely affected. Based on the previous example, you originally owe 0,000 on your foreclosed property, but you only get 0,000 from the short sale. Your lender can sue you for the deficiency balance of ,000 and you probably cannot cover this amount of money because if you could you wouldn’t go for foreclosure in the first place. So, if you cannot cover the ,000 and the bank sues you and you still cannot pay, your credit report will be negatively affected with a deficiency judgment. In particular, a foreclosure will affect your credit rating for 7 years and your credit score will be lower by 250 points. Moreover, you will not be eligible for a mortgage for at least 2 to 4 years.

Overall, a short sale will lower your credit rating, but the negative credit implications will be less than those of a foreclosure. Therefore, if you have the option of choosing between a short sale and allowing the bank to force you into foreclosure, it is wiser to choose a short sale to protect you credit score as much as possible.


11
May 10

How to Avoid Foreclosure & Keep Your Home

Foreclosure is an intimidating word with real life consequences.  Behind every court document is a frightened family fighting to maintain the home they worked so hard to acquire.  Regardless of what some sources imply, most people suffering in foreclosure are struggling to do the right thing.  Often they were not prepared, like many of us, for an unexpected illness, job loss, or divorce.  Follow the advice below to regain your financial footing and keep your home.

Most importantly, be vigilant.  Open all of your mail and read it.  Foreclosure is a multi-step process that can be short-circuited at nearly every stage, but only if you know what is coming.  If a court date is listed, make arrangements to attend.  Not opening your mail does not stop the foreclosure.  It makes the situation worse.  First, you do not know what is in the documents from the basic allegations to critical court dates.  This leaves you completely unable to defend yourself.  Banks make mistakes, but you cannot make that argument if you do not know what it is claiming against you.  Second, in most states, if the mortgage company is not able to serve the court papers on you by certified mail it can send a sheriff to your house to serve the papers on you personally or post the papers on your front door.  If that form of service fails, many states allow for a legal notice to be published in the newspaper for a certain amount of time to be sufficient notice, even if you never see it.

The latest economic crisis has made one thing painfully clear: anyone’s circumstances can change in an instant.  If your income changes be sure to prepare a new budget.  This exercise will be helpful for several reasons.  First, it will reveal ways you can reduce your expenses – eating out less, smaller cellular phone package, no movie channels, etc.  Second, it will show the mortgage company and court that you are committed to working the situation out.  Finally, if you know your financial forecast for the immediate future it puts you in a better position to negotiate with the bank – you know what you have to work with and what you do not.  You do not want to commit to another arrangement that really cannot afford.  It is important that when you compute your budget that you do not include money that you do not have such as a raise or bonus.

Even when your finances start to tighten, do not stop making payments completely.  Make partial payments even if you cannot pay the full amount.  Banks may not be allowed to continue foreclosure proceedings if they are accepting payments.  The burden, however, falls on you to go to the court date and state your case showing proof of payment in the form of cashed checks, money order stubs, etc.  Plus, a court will take into account your continued efforts to meet your obligations.

Be aware of your options before a foreclosure ever comes.  Mortgage laws are changing a little bit every day, but 5 options to avoid foreclosure have been around for some time: refinance, forbearance, modification, short sale, and bankruptcy.

Before the recent housing collapse refinancing unfavorable mortgage terms to those more palatable was the most common choice.  If, however, you have begun missing payments your credit may be damaged enough that you cannot get good refinancing rates.  Plus, you may not have the equity available or cash for a closing for this to be a viable option.

If you have experienced a temporary disruption in pay or finances, you may be able to negotiate a forbearance.  The key to a forbearance is that the condition that caused your financial trouble must be temporary because you are agreeing to still pay all of the money owed, but for a few months your payments are instead tacked on to the end of your loan.  This option has some practical consequences.  First, you are relieved of those payments for the time the bank agrees.  If the mortgage company agrees to a forbearance it should not charge you late fees for the time agreed upon.  Second, the mortgage accrues interest so your balance is still growing at your rate of interest.  Third, if you escrow your homeowner’s insurance and/or property tax into your monthly mortgage payments you may experience an escrow shortage that will have to be made up.  It may be advisable to at least pay the part of your payment dedicated to the escrow.  Finally, a forbearance may extend the amount of time you have left on your loan and/or increase the amount of your payment for the time remaining on your mortgage.  Be sure to discuss these issues thoroughly with the bank when negotiating a forbearance.  If the bank representative does not have solid answers, ask to speak to a supervisor.

Loan modifications are becoming increasingly commonplace.  This option is as straight forward as it sounds.  You have analyzed your finances and realize that the current loan terms, usually adjustable interest rates, are not going to work for you any more.  Contact the mortgage company to negotiate new terms.  Banks are loathe to do it, but stand your ground – the bank does not want to have another house they cannot sell in this market.  Know exactly how much you have to spend on the mortgage, taxes, and homeowner’s insurance, and work with the bank to get there.

Next, if your house is now simply more than you can afford, do not just abandon the property and walk away doing long-term damage to your credit and harm to the neighborhood you called home.  Talk to the bank about a short sale – how much they are willing to compromise and accept on a sale so you can try to sell the home.

Bankruptcy is another avenue to explore.  Chapters 7 and 13 are those most commonly applied to individual consumer cases.  If your goal is to keep your home, Chapter 7 is not the best option for you.  It is, in essence, a complete liquidation of assets to pay debts.  This will almost certainly include your home.  Chapter 13 is a better option for keeping your home, but you must have the financial ability to make monthly payments into a multi-year plan, usually 5, designed by the bankruptcy court.  As long as the plan is followed, any debts not paid at the end of the plan are discharged and you get to keep your collateral.  Under the court plan, a debt holder must be paid at least as much as they would if the collateral or asset is sold outright under a Chapter 7.  Bankruptcy laws are very complicated.  Plus, credit counseling may be required before a bankruptcy can be filed.  The best thing to do is talk to a bankruptcy attorney.  They can refer you to credible credit counselors and map out the most appropriate course of action for your family.

Be sure to insist that all new agreements with the mortgage company be in writing.  When you receive the paperwork review it to be sure it includes all of the new terms agreed to as you understand them to be.  Do not sign the documents until you are sure.  If you do not understand what the paperwork says, find an attorney to help you sort through it.

The foreclosure laws vary by state and they can be difficult to understand.  There is no need to feel alone through the process.  Every state has a legal aid department that can provide free or low-cost legal advice to those who meet income threshold requirements.  If you do not qualify for legal aid, do not give up.  Find the law school nearest you.  Most law schools have legal clinics where students supervised by attorneys can help the public with a wide range of legal issues.  For example, working with North Carolina Legal Aid, North Carolina Central University’s School of Law has a group of student volunteers guided by faculty called the Foreclosure Prevention Project.  Together, the organizations aim to inform the community homeowners of their mortgage options and assist with ownership issues.

When you feel your financial position start to slip out from underneath you, your greatest tools are tenacity and communication.  Banks have cut back on their customer support staff so be prepared to make multiple calls only to sit on hold.  The best thing you can do is arm yourself with a pen and paper.  Every single time you call the bank write down as much of the following information as you can, even if you never actually get to speak to someone:

the number you called;
the time you dialed the phone;
how long you sat on hold;
the full name or work identification number of anyone you do speak with;
as much detail of the conversation as you can jot down;
the next step; and
when it is to occur.

This information will help you stay organized and focused through a trying event.  You will know what needs to be done next and who is to do it.  Plus, if your case does go to court before you have had a chance to get everything straightened out with the bank, you can show the judge, magistrate, or court clerk all of the effort you have made to do the right thing.  In this financial climate, the person handling your case will probably be sympathetic, having heard similar stories for months.  Your case may not be dismissed, but it may be continued to allow time for you to make arrangements with the bank.

Homeownership is the American dream – until it turns into a nightmare.  Life is full of pitfalls that can push even the most fiscally responsible person to the breaking point.  There are several options available to keep the keys to your kingdom in your hand, but you have to take the initiative and fight.  Know your budget, document all contact with the bank, be vigilant about court dates and deadlines, and seek legal advice if you feel overwhelmed.  You can be sure that the bank will have someone knowledgeable in court to represent their interests.


4
May 10

Ten Infamous and Notorious Canadian Bank Robbers

Canada is overall a safe country to live in with the crime rate being not as high as in other countries or parts of the world. When researching for this article I could not believe how hard it was next to other countries to locate famous bank robbers but after hours of searching, I did manage to find 10 of the most infamous bank robbers in Canadian history. If you enjoy history then this little piece should be entertaining. Enjoy!

Stephen Reid

Stephen Reid got his infamous bank robber title after him and his crew known as the “Stop Watch Gang”, robbed over 100 banks across Canada and the United States.

Reid was born in Massey, Ontario on March 12, 1950. At the young age of 16 he turned to criminal activities, which eventually lead to his arrest and incarceration at age 21, after he took part in a theft of gold bars in Ottawa, Ontario. It was in the late 70’s when Reid manages to escape from prison along with Patrick Mitchell, Lionel Wright and that is when the famous “Stop Watch Gang” was formed.

During the gang’s bank robbing sprees, it is said that they had stolen at least million Canadian between the 70’s and early 80’s. FBI finally caught up with Reid in 1980 and he was sentenced to serve time in the “Marion Pen” in Illinois until his extradition to Canada. After serving sometime in Canada, he was paroled in 1987 and a year later went on to publish his book “Jack Rabbit Parole”, and then got married and had two daughters and moved to Vancouver, Island.

Life seemed to have turned around for Reid but in 1999, while high on cocaine and heroin and struggling with addiction he again attempted to rob another bank but was caught very quickly. This time Reid was sentenced to 18 years in a British Columbia jail.

Last I heard Reid was released on a day parole in January 2008.

Edwin Alonzo Boyd

Boyd is known for starting the infamous Canadian “Boyd Gang” in the late 40’s which pulled off a string of bank robberies across Ontario, Canada.

Boyd was born in Toronto, Ontario on April 2, 1914 and was the eldest son to a police officer. During the depression on the 1930’s he had minor scrapes with the law but nothing really serious. Boyd then went on to join the Canadian Army in WWII, but when he returned he couldn’t find steady work and once again turned to crime.

One afternoon, Boyd was reading the local newspaper article on how a kid the day before robbed a bank with no gun and got away with it. This got him thinking and soon after Boyd had a plan of his own. He went to his closet and pulled out a pistol which he brought home from the war and got a disguise. He then went to a bank and successful robbed it which started the next series of events. Sometime in the 40’s Boyd had been caught and was serving time in jail when on November 4, 1951 him, Lennie Jackson and Willie Jackson all escaped from jail and met up with getaway driver Valent Lesso and formed the “Stop Watch Gang”. Within months of their escape the gang had pulled off a string of daring robberies including the biggest robbery in Toronto’s history. About a year later Lennie and Valent where pulled over on March 6, 1952 by a detective when a gun fight broke out and the officer was shoot dead. A short time later Lennie and Valent where both caught after being injured in a shootout with police and Boyd was later tracked down.

Then on September 8, 1952 Boyd, Lennie and Valent and escaped once again and became the subjects of Canada’s largest manhunt in history but only after 10 days 2 of the men were captured and Boyd was caught 8 days after that. Boyd received 8 life sentences with a possible of parole and Lennie and Valent were hung on December 16, 1952 back to back for the death of the Toronto police detective.

In 1966 Boyd was paroled and soon moved to British Columbia where he married a disabled woman whom he cared for the next 35 years, till they were both placed in a home for seniors. Edwin Alonzo Boyd died May 17, 2002 at the age of 88.

Ken Leishman

Ken Leishman is known in Canadian history for pulling the biggest gold heist Canada has ever seen.

I couldn’t find much on the history of Ken but what I did find was interesting. It turns out that he was a polite bank robber who never used a gun and who made a series of daring getaways using stolen airplanes he had hot wired, earning him the name the “Flying Bandit”.  He is best known for his March 1, 1966 heist of gold bars from Winnipeg National Airport. He forged some documents and him and his crew went to the airport and simply picked up the 0,000 in gold and drove off.

Ken was caught a short time later but the all the gold except 1 bar had not been recovered. He was released from jail in 1977 and went on to be the President of the “Red Lakes” Chamber of Commerce in 1978. As far as I know he is still alive somewhere.

Monica Proietti

Monica Proietti is probably best known as “Machine Gun Molly”, a ruthless female gangster from the 50’s and 60’s.

Molly was born February 25, 1940 in Montreal, Quebec to a poor immigrant family, many of whom were involved in crime at someway. At the very young age of 13, Molly had become a prostitute to help support her family while her grandmother ran a school of crime for the neighborhood children. In 1956 at age 17, she had married Anthony Smith who was 33 and an Irish gangster and the couple had 2 children. By 1961, Smith had been deported from Canada for crimes he committed here and again Molly was on her own. She soon started to date another gangster named “Viateur Tessier” but after a short romance he was caught for a pervious bank robbery and received 15 years.

Molly then went on to become a getaway driver for a group of bank robbers but eventually ended up running the gang in the end. It was finally on September 19, 1967 when police had caught up with Molly and after a vicious gun fight and high speed car chase; she was shot and killed by police at only age 27.

It was said that Molly was suspected in robbing over 20 banks and got away with over 0,000.

Ivan Grose

Ivan may not be as infamous as the previous robbers you have read about, but none the less he is still famous here for what he went on to do after he served his time for bank robbery.

Ivan was born October 8, 1928 in Toronto, Canada. He never had trouble in school and was an ideal child growing up. From 1947 to 1951 he served in the Royal Canadian Air Force. For some reason in 1957 only 6 years after getting out of the Air Force Ivan then age 29, decided to hold up a bank in Hamilton, Ontario. During the robbery he took a 22 year old male as a hostage while trying to escape with ,000 but didn’t make it far before authorities captured him.

Because of Ivan’s service in the Air Force and for not being a career criminal, the judge only sentenced him to 19 months in jail which he was a model prisoner for his stay. After being released from prison Ivan was finished with the criminal life and went on to be a pretty successful business man.

Last I heard in 1993, Ivan Grose became the first Liberal MP elected for Oshawa, Ontario in 47 years.

Alvin Karpis

Alvin is another famous Canadian gangster from the 1930’s who is known for his crimes across the United States mainly.

Alvin was born August 10, 1907 in Montreal, Quebec but his parents moved and raised him in Topeka, Kansas. He started his life of crime and the very young age of 10 and by 1924 had been sentenced to 10 years for burglary to a reformatory. In 1931, Alvin was released from prison and soon joined the “Ma Barker” gang which down the road became known as the “Karpis-Barker Gang”. They had become one of the most formidable gangs of the 1930’s and had committed every crime you could think of. Authorities finally caught up with Alvin in 1936 and he was sentenced to life imprisonment at the new “Alcatraz” at the time.

Alvin served about 25 years before he was moved out of the infamous prison that was being shut down, and was moved to finish serving his time in another prison. In 1969, he was paroled and deported back to Canada were he wrote his first book in 1971 and then a second in 1979 which toured across Canada.

Alvin then moved to Spain in 1973 and on August 26, 1979 he was discovered dead in bed. At first it was said that he had committed suicide by taking to many sleeping pills, but shortly after doctors confirmed he had died of old age.

Roger Caron

Roger Caron had spent his whole life in trouble with the law and eventually wrote a series of books describing the series of events.

He was born April 12, 1938 in Cornwall, Ontario and had his first brush with the law at age 12 when he and a gang of children broke into a box car to steal can goods. He got away but later was caught when some of the boys told police who he was when they got caught. Roger then went on with his criminal activities until they eventually landed him in jail. While in prison in 1978, he got his memoir “Go-Boy” published which was about his 23 years of life behind bars and soon after got 2 more books published.

After being released Roger went on to lead a pretty quite life until April 1, 1992 when high on cocaine and shaking from Parkinson’s disease, he robbed a Zellers and tried to escape from police on a public bus but within minutes was captured. While waiting to be sentenced for the Zellers robbery, Roger had made 9 escape attempts. He ended up receiving 9 years and 3 months for his crime and the escape attempts.

While serving the 9 years and 3 months Roger had received, he ended up having 2 heart attacks and later on married a legal secretary. He once again was paroled on December 10, 1998 but less then 3 years later, police acting on a tip arrested Roger with a loaded gun which was against his parole conditions. In February 2004, he received 20 months for possession of a loaded gun and 15 other counts of robbery where dropped due to lack of evidence.

In April 2005 at age 67, Roger Caron was once again released and was considered a “Free Man”. Shortly after getting out of prison, he and his wife moved to Barry’s Bay in Ontario where they live today.

Tyrone William Conn

Tyrone was born to a 15 year old mother who eventually gave him up a short time later when she turned 18.

He was born January 18, 1967 and was raised in Belleville, Ontario by his adoptive parents. Tyrone was eventually given back to the adoption center because he was considered too much trouble and spent most of his young life going from one home to another. It was of no surprise to anyone when he was 16 he robbed his first bank. He was only on the run a short time before being captured by authorities.

In his 16 years as a criminal, Tyrone had spent half his life in prison and between the years 1983 to 1992, had been charged with over 30 different offences. By age 25 he had been sentenced to 47 years in prison and was due to be released in the year 2032, even though he had no prior history of violence.

On May 28th, 1998 Tyrone was transferred to the “Kingston Penitentiary”, one of Canada’s most secure prisons after successfully escaping from 3 other prisons. This jail couldn’t even hold him because on May 6, 1999 Tyrone became known as the only inmate to escape over the wall in the last half century. 12 days later on May 12, 1999 after robbing and escaping another bank robbery, police caught up with Tyrone in a basement apartment where he barricaded himself and had a standoff with police.

During the 90 minute standoff with police, Tyrone was in constant contact with CBC producer Theresa Burke on the phone. After 90 minutes and entering the apartment, police announced that Tyrone Conn had died of a self inflicted gun shot wound to the head.

Bill Miner

Bill Miner is not a bank robber but actually Canada’s first train robber.

Miner was born in 1847 in Bowling Green, KY and was never actually a Canadian resident but most of his crimes where committed in Canada. At age 19 he was sent to “San Quentin” prison for his part in a robbery. He became known as Canada’s first train robber on September 10, 1904 when he robbed a train of its gold dust contents worth ,000 dollars at the time.

Miner was not a very smart criminal and it showed when he tried to rob 2 different train shipments of gold dust and failed. First train was the “Canadian Pacific Railway Transcontinental Express No.1” which didn’t go as plan. Him and a few other guys ended up using too much TNT when trying to blow open the door to the train car which contained the money, they ended up blowing the box car totally away. The second train was the “Canadian Pacific Railway Imperial Limited” which was also a total failure. After getting aboard the train, Miner and the crew had not been able to locate the box car with the money and gold dust in it so they stole liver pills.  

On September 2, 1913 at age 70, Bill Miner had died of liver disease but had robbed over 30 trains and stage coaches and escaped prison 10 times through out his life. He was also known as the “Grey Fox” or “The Gentleman Bandit” because he never used violence during his crimes.

Through out the years there have been many movies, books and re-enactments made of Bill Miners life and criminal career which makes him infamous in my eyes.

John Hamilton

Little is known about this mysterious mans early life, until about the 1920’s when he started his criminal career. None of his crimes where actually committed in Canada but he is still widely known across this country because he was born here somewhere.

Hamilton’s criminal career started off when he rob a gas station in St. Joseph, Indiana and got caught a few days later. He was sentence to 25 years in prison and while incarcerated, Hamilton met fellow bank robbers Russell Clark, Charles Makley, Harry Pierpont, Homer Van Meter and the soon to be infamous John Dillinger. On September 26, 1933 a total of 10 men including Hamilton escaped and eventually went on to meet up with John Dillinger after the gang broke him out of prison.

Hamilton and the gang went on a huge crime spree in1933 that lasted to 1934 when finally John Hamilton was ranked number 3 on Indiana’s list of public enemies. On April 23, 1934 Hamilton was fatality wounded after a shootout with police and never received medical attention for the wound. He would later die on April 30th 1934.

John Dillinger and another member of the gang buried Hamilton’s body after trying to remove his face and finger prints with a type of acid called “LYN”. On August 28, 1935 authorities located the body and compared its teeth to prison dental records belonging to Hamilton and it concluded that it was the body of famous gangster John Hamilton.


1
May 10

Is A Short Sale Worth Your Time In Real Estate Investing?

Negotiating for a discount on the mortgage with a lender is called a shrot sale.   The leander allows you to buy the property for less than the mortgage balance.

Of course, a home owner must be behind on their mortgage for the loan to qualify for a short sale.

  As a real estate investor, you identify good candidates for short sale and you negotiate with the lender.
 Here are importand factors to consider before doing short sales.

1)     Qualify your properties properly
Not all properties qualify for a short sale.  Your efforts are likely to be wasted if you try to do short sales on the wrong properties.

A home owner must be behind on their mortgage at least two months.   You must consider the mortgage balance.   A property with only one mortgage needs to be profitable if you get only 10-20% discount.

 If there are two or more mortgages, negotiating all of them can produce a lot of profits. A second mortgage can be discounted by as much as 80% or more.

Properties with more than one mortgage are likely to be your best candidates for short sale.

Of course if repairs are needed, you must factor all the costs.

2)    Short sales take time
A short sale can take 3-6 months, sometimes more.  If you are a new real estate investor, you must take into account this time factor before adopting short sales as a full-time business model.

You must have some good capital that will sustain you through months of not making a profit. .  If not, then you should adopt short sales as a part time venture in your real estate investing business.

3)     Be prepared for failure
 Your short sale application can be rejected for any reason.   They can reject it even when it looks good. Be prepared for rejection.

 Having more than one short sale will help you.    Expect a 60-70% success rate if your candidates are selected well.

4)    Time is of the essence
 You might not have enough time to stop foreclosure if a property is about to be foreclosed.. Select properties that allow you time to negotiate with a lender.

5)    Have an acceptable exit strategy
A lender will not accept certain types of transactions for short sale deals.   For instance, lenders will not accept wholesale dels with “and or assigns”.

 You must close as soon as your short sale is approved. Normally the bank will give you a number of days like 30 days to close.

6)     Enjoy some big profits
Some properties will produce big pay days for you.   Once you have them well qualified, you can expect some good pay days for the ones that succeed.

Simon Macharia is a real estate investor in Dallas, Texas. He has done a lot of short sales among other transactions. His business is run and automated by real estate investor website from http://www.realestateinvestorswebsites.net