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Dominating Loss Mitigation Departments for Real Estate Investing Double Digit Profits

von Crystle Skinner (25-08-2018)


In this economy the short sale has become a huge part of the real estate investing world.

A short sale is an option when a homeowner owes more on their mortgage than the home is currently worth. If the bank is willing to sell the property for less than what is owed, then that is considered a short sale or short pay.

Every real estate investor who is involved in making offers on or purchasing short sales will have to deal with the banks loss mitigation department at some point. When first calling a bank, many times you will get a receptionist who may not be very willing to help or the bank may call the loss mitigation department another term, making it harder to speak the "same language" as the receptionist whom you're a talking to. If this happens, ask for the loan workout department, the short sale department, or the loan modification department. All banks that service or hold upside down loans will have a department dedicated to the workout of that particular loan!

Once real estate investors get to the department that services the loan, they often make a common mistake that can mean the difference between 5-6 figure profits and a deal that falls apart. Here is the HUGE mistake! A lot of real estate investors will try to act like they know more than the bank (which they probably do). The real estate investor will start by spilling all of this info, like they are all-knowing. They will attack, trying to get the best deal possible so that the investor can flip the property for huge profits.

After dealing with hundreds of short sales over the years, I can tell you, this is the wrong approach. It works much better to play stupid. Investors, don't act like you are going to make huge profits on the deal, in fact, play it down. In other words, "don't show your cards" to the bank. Here is a much better approach.

"Hi, my name is Dan Koch, I am a friend of Frank and Judy. I am calling about their house on 123 Street. Frank and Judy approached me and asked if I wanted to purchase their house. I would consider looking at and purchasing the house to rent it out to my son or daughter, but after talking with a few local realtors and looking at the comps, it turns out Frank and Judy owe way more than the current market value of their home. Will the bank consider taking a short sale?"

This is the friend approach and tends to work a lot better than coming across as a savvy real estate investor. It allows the loss mitigator to put their guard down a bit. Getting on the good side with these people is imperative if you want to have any chance at a 5 figure flip and using the "friend approach" has been a simple method that has served me well. The next step after the initial conversation will help you quest for a 6 figure flip become even more of a reality.

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