Baltimore HUD Homes

I recently spoke with a pair of short sale investors who completed a nice short sale and made more than $37,650. But what was MOST interesting about this one deal is that these investors weren't able to do back-to-back closings. Instead of buying the property and re-selling it immediately (to what we call the "C-buyer"), these investors were unable to find a buyer right away. So they ended up holding onto the property for about a month.

Here's the problem: Most Short Sale investors don't really want to be landlords. And he typical investor already HAS a house for his family to live in, so he's not necessarily looking to hold onto properties. Still, sometimes you just have to hold onto a property for a little while to make a deal work. Yes, it costs some money, but holding onto the property for a little while is often the only way to keep control of the deal and not risk losing it completely.

It's easy to understand why back-to-back closings are so popular among Short Sale investors. There's very little risk of getting stuck with a house and the financing via "dough-for-a-day" lenders is so cheap because they already know there's an end buyer when they lend you the money for the A to B purchase.

And while back-to-back closings are certainly the cheaper way to do the closing, it's not the only way. The big thing to remember about holding onto the house for a month is that you have an exit strategy so you're not going to get stuck with the property. Back to back closings are great when you can do them; however, they are becoming increasingly difficult and are under intense scrutiny from title insurance companies, regulators, state attorneys, and other investigative government agencies.

Real estate investors should pursue exit strategies that DO NOT depend on back-to-back closings. If a back-to-back can work out, that's great! But if you are depending on them exclusively, you will soon find yourself in a corner.

Ben Pargman is a real estate attorney and the nation's number one expert in Short Sales. Check out his website at Short Sale Service for his free audio course on how to make money in today's real estate market.

Article Source: Ben Pargman