Patient me … I even waited more than 7 months to be “amused” by their obvious desire to make me laugh before I left.

The bank was foolish enough to lend to these people in the first place, so now they have to find someone ‘more foolish’ then they were to dump it on. They hope to find a greater fool than themselves.

Sadly, I don’t think they will…

Nick

Thanks for your Comment – some great points.

First, to the extent that property can be sold directly from a seller to an end-buyer and the transaction facilitated by a licensed agent without an investor – I agree, it should. Or, in the context of my article – to the extent that a seller and lender CAN meet the expectations of the retail market – they should and, in my opinion, there is no need for an investor and no value that the investor brings to the table.

However, the conversation with the agent highlighted in the article is an example of how many (if not most?) short sales just can’t make it successfully to the retail market – the retail buyers do not have the patience or stomach to get through the (usually) lengthy and frustrating process.

Realtors alone can’t do a deal no matter how skilled – there has to be a Buyer and if the retail market can’t produce a retail buyer, then there is a legitimate role for a wholesale buyer – at a wholesale below market price. The point of my article is that when the retail market does not solve the problem – there is a legitimate role for investors to step in and do at the wholesale market what the retail market could not do.

If your question is can a real estate agent represent clients as an agent and also be an investor in the same transaction – I would say NO WAY! That’s a recipe for disaster.

I’d love to review the Attorney General letter – please email a copy to benpargman@theshortsaleservice.com.

Another point that your reply implies is that real estate investing and short sales is complicated stuff – I agree. That’s why you’ll never see me on YouTube joking about it and claiming that if you just buy my whatever you’ll be rich tomorrow. However, for those who understand how to add value where the market needs it and the law allows it – there is a lot of important work to do and a lot of money to be made.

Thanks for your Comment.

Ben

I have successfully flipped short sales myself and have gone back to operating my retail negotiation company. My “profits”, while relatively small (1000 – 2500 per file), never get in the way of the transaction, whereas a double close adds multiple obstacles that exist simply because someone is trying to create a profit spread thats directly in conflict with the lenders interests.

Is it truly in the best interest of the seller to exclude an important pool of buyers (IE. FHA or any other lenders with seasoning requirements) to secure that profit spread? Or perhaps when you are running against the clock to list the property well above the negotiated price?

Recently I received a letter from the Attorney General office discussing this type of investing, you’d be suprised at what he had to say.

What are your thoughts? Can someone in my position begin “investing” in these short sales without breaching fiduciary duties to my clients? In WA. State, any distressed property buyer is considered, to a certain extent, fiduciary by law .

Your thoughts?

I saw you at Jeff Adams’ class a couple of weeks ago.

Enough with LA already! How about coming up to San Francisco? There are tons of short sale opportunities here, particularly high-end ones, and I would love not to have to shlep back down to SoCal to attend your class. Besides, it’s much nicer here than in LA…

Thanks,

–Douglas Mandell