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 12th at 6:00 p.m. and holding a One Day Event in Tampa on Saturday, February 14th 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
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