How Becoming Homeless Helped Me to Buy Million$ of Foreclosures

Back in 2001, due to a combination of buying properties at market value and having no cash reserves, I started losing my properties to foreclosure.

Ultimately things became so bad that by 2002, I lost my own home to foreclosure so I became homeless.

In the process, however, a real estate agent taught me about shortsales. It was a way to CREATE equity out of foreclosures.

A property worth $300K with a $400K loan is upside down and normally won't be profitable. However with shortsales, sometimes banks will agree to a $200K pay-off.

Why will the bank agree to this? It depends but usually banks are not in the business of owning real estate. Per every $1 of bad mortgage on their books, they can't lend $8 so they'd rather get some money from non performing notes.

Also, banks are scared of liabilities that come with property ownership. I've seen banks agree to shortsales when they realize they have a properties with mold issues, properties with structural issues like foundation problems, etc.

When I realized the power of shortsales, it became one of the tools in my acquisition toolkit. Once I was back on my feet and buying properties again, and especially when 2008 happened, shortsales helped me to buy MILLIONS of foreclosure!

Shortsales is just one of the 5 strategies to make money with foreclosures. Shortsales has a "twin" strategy and I will share that in my post tomorrow.

P.S. Good thing my mom and dad agreed to let me stay in their home when I lost everything. So I didn't have to be the guy with a cardboard sign begging people for money.

2 comments

Apartment Investing Secrets

skool.com/apartment-investing-4128

This group is all about sharing apartment investing secrets.