Most real estate investors are looking to acquire real estate at 70¢ on the dollar or less, including repair/rehab.  The problem these same investors face is that the vast majority of real estate is not available at these types of discounts.

How then, does a real estate investor acquire properties at discounted prices?  The answer is simple: SHORT SALES!

Decreasing home values following the broadening of lending laws has awakened Americans to this previously unknown means of avoiding foreclosure.  Many individuals do not realize that short sales have been around since the invention of the mortgage!

So, what exactly is a short sale?  A short sale is when you purchase a home from a homeowner for less than what is owed.  The mortgage holder or other subsequent lien holders agree to take less than payment in full and forgive the remaining balance to the homeowner in an effort to avoid the cost of auction as well as the possibility of actually owning the property themselves post-auction.

Understanding short sale is essential in today’s real estate market when 80%-90% of all homes currently in foreclosure have either a complete lack of equity or are, even worse, upside down and owe more than the properties current market value.

Therefore, failing to understand how to successfully negotiate a short sale means that you are will not be able to work with 80%-90% of the distressed homeowners you come in to contact with.

Short sales do require extra patience as they take more time and effort to complete than a simple equity  buy out.  However, they can be just as profitable and well worth the extra perseverance!

For example, let’s consider a home valued at $200,000 where the homeowner owes $210,000 against it.  Most real estate investors or novice property researchers would walk away from this deal due to the lack of equity.

Instead of determining that the lack of equity means the end of the road, think of it as the beginning of the short sale process.  Through the short sale process you will “Create Equity Out of Thin Air” by negotiating with the banks Loss Mitigation Department.

By applying practical short sale principles and negotiation techniques, you can realistically get the lender to agree to take $120,000 as full payment on the loan!  That’s 60 cents on the dollar with a potential profit of $80,000.   You created $80,000 of equity!  Not only is this now a great real estate investment, but it also saves the homeowner from foreclosure.  Short sale creates a “win-win” situation for both you and the homeowner.

If you are not currently negotiating short sales, you are passing up great real estate investment opportunities!  Capitalize on all avenues of acquiring real estate at deep discounts while using short sales to help the homeowner avoid foreclosure.