I often get feedback not only in my own investing business, but also from students around the country, who get frustrated because other people, (often times realtors with whom they’re trying to network with) tell them that flipping short sales “illegal”.
This actually happened to one of my door knockers very recently. He was calling a home that was listed for sale (evident by the sign out front). After speaking with the owners and getting the agents contact info, he called the agent to let him know that we would like to write an offer on the property (tomorrow).
The agent said that his father had recently been to a DRE seminar here in California, and apparently a CAR attorney had told his father to “steer clear of double escrows”. (Important note: this is 100% hearsay, but let’s assume for the purpose of this blog post that the information is correct).
The agent asked us if we could “send him something” in advance of our meeting. I figured that this might be happening to other people out there as well, so I have included some of the email that we used, so you can use it in your own marketing as well.
Please note that the information below is meant for an email (and NOT a flyer) simply because it contains links. Feel free to copy and paste and use as you see fit:
*************************************************************************************
Recently, Freddie Mac, FHA and Wells Fargo have all made major changes to their business models to allow for short sale properties to be flipped, legally and ethically. In fact, that’s what me and my company, www.SaveMeFromForeclosure.com do.
Now before you get worried about thinking that we’re doing something “illegal”, I want to point you to 3 specific bulletins from these three major financial institutions that have been issued in the last 6 months:
First, in October of 2009, Freddie Mac released a bulletin that you can download here: http://www.freddiemac.com/sell/guide/bulletins/pdf/bll0924.pdf. On the first page of this bulletin is link to Freddie Mac’s Best Practices for Loans Involving Possible Property Flips, which can be found here: http://www.freddiemac.com/sell/guide/bulletins/pdf/bll0924xA.pdf. Most interesting to note is that Freddie Mac says that
“A property involved in a flip may be resold on the same day or within days, weeks, or months of the purchase. In some cases, the seller of a property flip never holds title to the property, but instead sells or assigns their interest in a contract to purchase the property to a third party.”
Freddie Mac then goes on to say that:
“Property flips are not inherently illegal and not all transactions involving a rapid purchase and resale are improper. Legitimate property flips are acceptable transactions in connection with loans purchased by Freddie Mac.”
Finally, Wells Fargo, who issued more mortgage loans that any other company in 2009, has now allowed their borrowers to buy properties that are being flipped by others. You can see this internal document that Wells Fargo mortgage lending released at the beginning of 2010 here: http://www.macedesigns.com/clients/srec/WellsFargo.pdf
So why is this significant? Three MAJOR players in the United States housing industry are changing their policies and business practices to allow for short sale flips and for homeowners to get mortgages where the seller is “flipping” the property to the buyer.
I’m sure you’ll agree with me that if 3 big time banking giants like HUD, Freddie Mac and Wells Fargo are making these changes, they’re accepting the legitimacy of short sale flips and them as a viable way to help eliminate foreclosures and help rebuild and stabilize the housing market.
In fact, last fall, before 2 of the 3 major announcements were even released, Mr. Lem Marshall, Special Counsel to VAR (the Virginia Association of Realtors) posted an article in their Commonwealth Magazine, a publication that is “A journal for real estate professionals published by the Virginia Association of REALTORS®”
You can read the entire article here. (The main article is on page 12 of the publication, which is page 14 of the PDF), or, if you prefer a quick 2 page PDF document extracted from the magazine covering this very specific topic, you can download it here. What’s important to note, however, is how Lem ends the article, and his analysis of short sale flips, with the following paragraph:
So who loses? Nobody. Even the tax collectors and insurance folks come out ahead, as they get payments from owners making productive use of the asset. We all gain when inefficiency, uncertainty, and waste are squeezed out of the system. And we help hasten the return of reasonable market valuations, something of great benefit to our communities at large.
***********************************************************************************************
Hopefully that the information can help you in your business. I would recommend writing the email in your own voice, or even taking the information above and making a 2 or 4 page flyer that you can use to market to agents with short sale listings. I’m actually in the process of doing that myself, and it will be made available to our community of exclusive SaveMeFromForeclosure.com local representatives.
However feel free to copy and paste any of the information (and links) in this email and use it in your marketing. I would love get your opinion on what we’ve included here, and how you’re using it in your business, if at all.
Also, if you have any success stories (or challenges) using this information please feel free to post them here in the comments section. We love hearing success stories, but if you have any challenges using this hopefully as a community we can help you further.
Happy Investing!
Follow Me On Twitter 
Follow Me On Facebook
Follow Me On Linkedin
Follow Me On Youtube
SECURE & CONFIDENTIAL