Buying Commercial Real Estate Using Tricky Short Sale Tactics – Can You Legally Do It?
Like the traditional real estate investing model, short sale investing is based around the idea of finding and buying properties at a discount. Moreover, buying right is also important in the short sale business. The primary difference between the two models concerns the holding time and exit strategy used to profit on the deal. The most common exit strategy in the short sale business is a back-to-back closing where a property is bought and sold in the same day. This reduces the need to buy at 65 percent of the as-is value because there are no rehab or holding costs. This gives investors more options that can be pursued and a greater opportunity to generate more business. In the example below, the subject property is in foreclosure and the mortgages are equal to or close to the ARV. Despite the recent interest in short sale investing, competition is still low. Many investors will not touch a property that is fully leveraged or over-leveraged and in foreclosure. For those investors that
