I’m working a Short Sale for a property owner, I'm just getting started with the paperwork, the 1st & 2nd mortgage is
with IndyMac. I have a few questions
regarding the initial package. I already have a choice of a few buyers ready to
purchase this house. I plan to close on property first and then flipping
it to one of the buyers, hopefully the same day. If anyone has any comments or advice on this please
post.
I have a few other specific questions:
1. Advice on how I fill out the ‘estimate settlement statement' with proposed
paid closing costs (is this the HUD) – what exactly is this?
2. Advice on how I provide the bank a proof of financing (Pre-qualification
letter) that they require when submitted in the initial SS package? Personally,
I do not have enough money to meet this requirement.
Tags:
Mitchell Gilbert ...the first question is are you a realtor or an investor/flipper trying to do a deal? It sounds like you need assistance from an experienced buyer agent "short sale" realtor. You've come to the right place at ShortSaleSuperstars. I'm going to make a few assumptions -forgive me! (1) you are not a realtor and (2) you need money or a way to document qualification. Please note that there is a group, Old School Title -they might be able to help you with documentation -at a cost for flipping. Most importantly you must have the documents which disclose that you are going to flip and provide these to the seller of the property. It's a bit more involved but it's a starting point. Rules have changed regarding "holding time before flipping" -check it out.
Mitchell
I have to disagree with Maria on this. There is both illegal and legal flipping that goes on across the country everyday. I believe that if the lender has been provided full disclosure and they agree to the short sale, then there is not an issue. I would check with the title company/attorney you are planning on using whether they allow simultaneous closings and how your transaction should be structured. I personally know several real estate investors in Phoenix AZ who are utilizing a technique which implements a homeowner trust. Several others utilize option agreements. What determines if a transaction is legal or not in my opinion is arms length v. non-arms length.
As far as the estimated closing statement (aka HUD-1) that is needed, this documents summarizes how the transaction will be structured, what liens are being paid, closing costs, tax prorations, etc... a good resource is the HUD-1 discussion board located here on this site. http://www.shortsalesuperstars.com/group/hud1
There is a HUD-1 in a fillable PDF you can use as well as a link to a website which will prepare a HUD-1 for you. In my area I simply request that the title/escrow company I plan to close with prepare a pre-liminary HUD-1 for me which I in turn submit with my short sale package.
Hope that helps
On the HUD always pad the title fees, lump all the title fees (settlement, re conveyance, doc prep, etc) into one and leave the title insurance on one line. Add 350 for a whaterhold 200 in estimated assessments. Prorate taxes and other per diem liens at least 6 months out to have enough money left over to cover anything that may come up. See attached.
As far as Proof of funds have your had money guy submit a letter that says you have funds sufficient enough to fund real estate transaction at the property located on..... and have it be on letterhead. See attached.
Dont call it flipping, call it back to back closings. Its totally legal, just make sure you over disclose to the seller and bank to cover all your bases and use an affidavit of understanding and other forms.
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