There are times when we are going to purchase a short sale and then rehab the property for a higher profit. During the rehab on the property, I take my partners shopping. We go to Home Depot and look at all the items I normally put in my cookie cutter houses and I show them why I have chosen each and every product. Then they get to pick their own products and we discuss the price differences to analyze the affect on our profit. It is really fun shopping for an entire house in Home Depot, but the bottom line to save money. After our trip to Home Depot, we will head over to the cabinet shop if it is a higher end property and we will pick the cabinets and handles. Then we are off to the granite company with a piece of floor tile and a cabinet door so that we can match our granite throughout the house. I call this program my Mentor Program as I bring everything I have learned and down through my Real Estate Junkie course to my students. By the time we are done, it’s been a “power-shoppin’ day!”

I always recommend that you have a Pro Account at Home Depot which gives me an automatic 10% off everything and if you are a member of a REIA group, you can save another 2% so … working with me already has saved you the cost of a new kitchen on the rehab or more.

From there, I ask that all my items be placed through the bid room at Home Depot and see how much of a discount that I receive. They always have to adjust my bill based on the high volume of business I do with them. I get a quote from the cabinet and granite companies and forward all these bills to my students and we discuss the costs. This way they are educated on costs. In addition, if electrical or roofing is necessary, the student is required to provide me with 3 bids and then we call the contractors on the telephone and ask them “is this best you can do?” I normally get them to drop their prices again!

The main point of partnering with individuals is that most of the time my butt is in the seat and their feet are on the street. Their job is to check the house daily and make sure everything is in order. Recently, Aisha went to a house to receive the appliances, which isn’t always necessary, the water heater had given out and was leaking in the garage. This is a common problem with water heaters so…..Guys and Gals be aware! Always walk through the entire house each time you visit.

The worse thing that has ever happened was when Janeil went to show our house in Ocala to a new buyer and saw water running out of the garage. Of course, my first thought was the water heater; however, I was wrong. As she moved throughout the house and made it up to the 2^nd floor bathroom, there was a tub that was deliberately plugged and turned on. It was overflowing from the bathroom, onto the new carpet in the hallway and heading to the bedroom. Thank God there was a knott in the floor board that served as a hole that had all the water go into the garage ceiling. She called me very upset. I told her lock up the house and tell the new buyers you can’t show it because there is no key. Well…. The buyer found the glass sliding door open and he walked in and unlocked the door for them. What a surprise to Janeil because she thought it was all locked up. She continued to show the house and I immediately called Stanley Carpet Cleaner who charged $1,200 to clean the carpets, throw the pad away, and use 3 HUGE dehumidifiers to take the moisture out of the air. The heat had to be turned on to 90 degrees, it was HOT!!! I immediately left the office and headed out there with my 2 huge warehouse fans to help dry out everything.

I arrived in time for Stanley Carpet Cleaner, but wasn’t fast enough to see if we could save the padding by having them extract the water out of them. I made them attempt to do this outside and the pad fell apart into tiny pieces. As we waited for them to return with their equipment, I started tearing down the drywall and the insulation in the garage. About half of the ceiling was damaged and the cost for repair and replacement was $2,000.

Lesson #1: Always go inside your house and check every door and window and make sure that no one has left the doors or windows unlocked so they can return later. Don’t ever assume that all Realtors or Contractors will lock up your houses. I often drive off and get 5 minutes away but go back to double check myself that I scrambled the code on the lockbox. This is very important.

Lesson #2: Change your actual lockbox code once all contractors are out and your supplies have been delivered, so that nothing comes up missing (I haven’t had this experience, but I don’t want to, nor do I want this for you!).

Lesson #3: Never show a house unless it is complete because 60% of people think through visual processing. If something is incomplete and most people cannot envision a complete home, then you have now lost your Buyer. First Impression Is Everything!

Even though this Article states “Rehab Can Be a Jungle,” I can honestly tell you we bought the property at the right price so we will just take a little less profit. I cannot stress enough the importance of buying low, so events like this don’t have a great impact on your profit.

Stay tuned for the profit numbers on these deals! I hope to see you either at my training at my office or you can go on-line and order the 3 Day Live Event that you can download to get the real facts about shorts and rehabs. Always remember, “having a Mentor walk you through it and hold your hand will stop you from freaking out” and that is a direct quote from Janeil!

The Rehab Jungle can be just as much fun as swinging from the vines as long as you know what you are doing. Even if you have a few blips, when you buy low, there is always room to profit BIG no matter what! Please continue sending me your questions and topics that are most helpful for me to write to you about. Your Success is important to me, so let me know how I can help!!!

Happy Negotiating!

Kimberlee Frank

www.SellFastRealty.com

www.ForeclosuresGonewild.com

www.RealEstateJunkie.com

www.ShortSaleNegotiating.com

Like me on www.facebook.com/foreclosuresgonewild

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Let me summarize with a question before I start writing….How many hours in your current job or situation will it take for you to make $65,000? For most, this is more than an annual income, so I know your answer would be 2,000 hours or more. I didn’t count the hours on this deal, and we haven’t closed yet, but I know it will be double digit hours, not in the thousands. If someone has told you that short sales don’t work, they either didn’t have the right partner, weren’t properly trained/educated, or……..they are lying to you because they want all of the short sales to themselves and don’t want you as competition.

My office exploded in December! I’m thinking “time off, relax, jingle bells” but I had a short sale deal that had other plans for me. I ended up at the City of Margate fighting two liens that were filed against my short sale deal, in addition to a $2,300+ water lien. Lien #1 was for a Dirty Pool and Lien #2 was because seller did “not” file a Vacant Home Affidavit, Lien #3 was the water. The total due, without the Water Lien, was over $40,000. The Lien notices were attached to the front door, which was covered like a jungle, on April 7, 2014. I represented the Seller as a Listing Agent and the Buyer as a Selling Agent. I got a Power of Attorney from the Seller so I could appear before the City of Margate and negotiate the liens. Whatever was agreed upon at that hearing would be set in stone and could not be re-negotiated. Before we could even get the City to stop assessing daily fees, the dirty pool had to be cleaned. We didn’t know there was a Water Lien of $2,300+, as the lien that was regarded was only for $500.00 but the City charges a maintenance and garbage fee monthly of $70.00 no matter if the water is on or off. Not Good! I needed water in order to drain the uncovered pool (no screen) and refill it.

I contacted the Seller for help, as I had already received a short sale approval letter for a purchase price of $112,000, no deficiency, but without the bank paying any liens. My Student Partners, Aisha and Douglas, and I can sell (ARV – after repaired value) the house for $230,000. The Seller works at Home Depot in New Jersey and said he had NO MONEY to clean the pool. So … what would you have done? The house needs about $50,000 in rehab from Top to Bottom (roof, ac, marcelite for the pool, etc.) and had been vacant for over 4 years. The Seller had an attorney who also wanted $7,000 for his services, but the Short Sale Lender, Bank of America, wouldn’t pay attorney fees. Of course, I negotiated with the attorney and got him down to $2,000.

We then started marketing the house for $135,000, leaving us a $20,000 profit should we decide to do a quick flip in case the Margate City Liens and Attorney would not be paid for by Bank of America. We had 3 Cash Buyers ready to buy the house, but remember, there is a 30 day hold. However, when you come to my training, I teach you how to legally transfer property the day you buy the property with the 30 day hold in place.

Bank of America’s negotiator said the investor (whoever loaned the Bank the money) would not pay any of the liens. Once we received the lien information, we submitted it to Bank of America and demanded that they pay it and that I would personally go down and negotiate the liens and once they are agreed to, they were set in stone and could not be changed. Therefore, based on my Master Negotiating skills, I knew I had to attend and that my Student Partners needed me do this versus them. We had a February sale date and needed to close NOW, as Bank of America’s value would have increased based on the recent sales. We couldn’t take the chance that would happen.

I went to the house with Aisha and looked at the pool. We turned the electricity on, as we needed that for the pool pump. I brought my lead contractor with me, in case we needed to fix anything. I spent over $1,000 to purchase and install a new pool pump, and then tons of shock and liquid chorine to see if we could clean the pool ourselves. Unfortunately, there were about 1-2 feet of leaves in the bottom, so it didn’t make a dent in the pool at all. My Student Partner got a few pool contractor quotes to drain the pool, powerwash, refill and stabilize it so the lien fees would stop and I could argue for a discount. The water company demanded that we pay $2,300 to turn the water on. If you know me, I don’t like spending any more money on a deal that I am not sure I have, until the issues of the liens are settled and that the bank pays them and not the Buyers (us). I had the pool guy immediately start draining the pool. He paid the neighbor $100, without our consent, to use their water. I had the water turned on for a 24 hour inspection on behalf of the Buyers. They were to turn on the water at 9:00 a.m. and turn it off the same day at 4:00 p.m. I advised them that I needed at least 24 hours, but they said NO. The guy who went to turn off the water saw what we were doing and called and said that he was instructed to turn off the water, however, he would do us a favor and turn it off at 8:00 a.m. the next day. God was on our side!

I attended the City of Margate hearing for the Dirty Pool and the Vacant Home Affidavit that was never filed. I argued that the Bank is doing a short sale and they only have granted $1,000 for both liens which would have to suffice for the $40,000 lien. I also informed them that in order for the pool to get cleaned, I had to spend my own money as a Single Mom with two kids and an 85 year old mother dependent on me, to pay for a new pool pump and clean the pool. I told the Judge/Magistrate that I had hard costs out of my own pocket of $1,000. He stated he didn’t think the Seller cared about his property, so I shared his situation based on his hardship letter, that he attempted to do a loan modification, his wife left him, he got a job transfer and the tenant he left in the house (family) didn’t pay any rent and damaged the home. Long story short, I got them to agree to $1,000 for the Dirty Pool and $1,000 for the Vacant Home Affidavit. Both needed to be paid in 30 days or interest and fees will go back to original fee and keep growing. That was a savings of $38,000 on this deal that I just made for us! 99% of Investors would have thrown this short sale deal away, knowing all of the expensive liens that were cutting into their profit. I then went to the water department and tried to negotiate the maintenance and garbage fee; however, they refused.

Next, I had a HUD prepared making the Bank pay for all three liens in the amount of $4,300 and attorney fees of $1,500. I put $2,000 on the Buyer’s side for the attorney. The negotiator for the Bank stated that they will not pay any liens on the property. I asked to speak to a supervisor and after a long conversation stating everything above except that the water lien was $2,300 (they normally don’t like paying water), they agreed to pay $4,300 worth of the liens but not the attorney fees. Again, most Investors would have thrown this deal out, only because they don’t know all of my tricks that I teach. I said I think I can negotiate with the attorney and get him to accept $2,000 from the Buyer instead of the $7,000. The attorney threatened to lien the property. I asked how quickly we can get the approval letter so we can close and he said 24 hours.

To make a long story short, we bought the house for a total of $114,555.22 including closing costs, got the Seller’s deficiency judgment waived and are now in the process of rehabbing and selling it for $230,000. Again, I ask, how many hours in your current job or situation will it take for you to make $65,000 profit? If you added up the hours, it will only be a few weeks of work to make this money. And this is only ONE of the many deals that you could have in the pipeline! SHORT SALES WORK!

The things I did to get this deal done can be done by YOU….or you can just partner with me. My system is a step by step program that will teach you how to do it yourself, instruct your own negotiator, Title Company or whomever and also teach you how to wholesale a short sale without lifting a finger. My next training is February 20-22nd and there are only 30 seats and many have already been filled so … act now to fill your seat. If you need to see me live before you sign up, I will be speaking at the Tampa REIA on Thursday, February 12^th at 6:00 p.m. and holding a One Day Event in Tampa on Saturday, February 14^th from 9:00 a.m. to 5:00 p.m.

Let me help you make 2015 your MOST ABUNDANT YEAR EVER, so that you can leave a legacy for your family. Looking forward to seeing you at the live training or the One Day Event!!!!!

Happy Negotiating!

Kimberlee Frank

www.ForeclosuresGoneWild.com

www.RealEstateJunkie.com

www.ShortSaleNegotiating.com

www.SellFastRealty.com

Like me on www.facebook.com/foreclosuresgonewild

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In the past several months, Wells Fargo has taken on a new policy wherein they want a copy of all lien releases for any outstanding liens on the property PRIOR to submitting the file to the negotiator for review. They are now pulling their own title work and reviewing it to make sure that all liens are being reported to them. This may cause a huge battle because often the Second Lender will not approve the lien release until they have the written approval from the First.

I have always said that Wells Fargo is one of the strictest Banks that requires a crazy amount of paperwork for them to move forward. We recently had a file wherein the second mortgage, even though they had a second mortgage on the property, took the Sellers to court on the Note and received a Final Judgment against them. The seller was even garnished. However, in Florida, if you are head of household, you can stop the garnishments if you do not agree with the garnishment, so that ended. We have been fighting with a Negotiator that cannot put the second mortgage payoff and the Final Judgment Payoff together as one.

The Bank Negotiator keeps asking for another payoff from Citi Financial which is both the second mortgage and the Final Judgment Plaintiff. She just can’t get it thru her head! We have gone over her head multiple times to a supervisor and she refuses to submit our file. I requested a copy of her title work so we could see what she is seeing, but she just keeps sending us the recorded page number of the Judgment. We have contacted Citi Financial and they said yes this payoff includes the mortgage and the Final Judgment. We have asked Citi Financial to state that in their letter but they complain that this is a standard letter and it will not be tailored to the request of the First Mortgage Company.

So … What do you do??? I have requested our title company to provide us with current marketed up title to verify that they have all lien releases and we can move forward. Marked up title is usually done at closing if the Buyer and/or Seller has an attorney, just to confirm that that are no more liens on the property and that they can guarantee the title free and clear from all outstanding liens.

At this time, we have submitted this information into Wells Fargo and asked for a supervisor as the Negotiator is not a title agent and has no idea what she is doing due to the fact that there are over 7 liens on this property and she doesn’t understand anything. All I can say is that many of the Banks have no intelligent life form working there to understand this process.

Many of the processors and Negotiators are thrown into Short Sales without knowing what is right or wrong. They just follow a checklist and if your file does not fit in their standardized checklist then it will not get through. That is why your Title Company may need to help you and/or the Bank supervisor needs to help. If that doesn’t work then send an email directly to the investor of the loan such as Fannie Mae, Freddie Mac or FHA, stating in the subject line of your email “Wells Fargo does disservice to FHA!”

That is my next step if she doesn’t move this file through as I am fit to be tied and I want this deal to close. It has not yet been submitted to the investor for final review and she is withholding a deal that can close immediately once it is approved.

Know your lender and learn the key things to tell your negotiator to get your deal through.

Join me at my 3 Day Live Event in February. Stay tuned to hear about a short sale deal that I just negotiated and closed with my partner. We could wholesale it for a profit of $20,000, but we’ve chosen to rehab and sell it for a profit of $40,000-50,000. I will tell you more in the next article, but remember, short sales DO work and people are cashing in BIG checks on short sales!!!

Please keep sending me your questions and topics that you would like to hear about, so I can be sure to keep feeding you with the information that you need in order to move ahead in your real estate dreams for 2015!!

Happy Negotiating!

Kimberlee Frank

www.ForeclosuresGoneWild.com

www.RealEstateJunkie.com

www.ShortSaleNegotiating.com

www.SellFastRealty.com

Like me on www.facebook.com/foreclosuresgonewild

Like me on www.facebook.com/sellfastrealty

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