Now, since the beginning of real estate investing education, mentors, gurus, professors and “guys on the street” have been pounding out the mantra: “It’s all about networking.” And that is true. However, there are so many people out there trying to network with the types of buyer that you are looking for – often without the experience and expertise they claim – that it can be very difficult to actually connect with qualified, interested buyers who are ready to act when you show up with a property to flip, even if the property is an unequivocal deal.

Today, networking is about far more than handing out business cards or exchanging email addresses. It is about effectively making connections and creating references for yourself so that when you need to act fast, people will take you seriously. Here are a few ways to do this:

• Partner with someone more experienced
  You might even want to do this if you have to pay for the mentoring, as long as that person is willing to vouch for you. Many “guru’s” offer this type of program, but you need to make sure that you will get real time with that guru during which you can make an impression, and that the guru in question has the type of reputation and influence that would enable him or her to help you make connections once you have completed their program or even while you are in it.
• Describe exactly what you offer
  If you can do one good deal with a good connection, then that person will likely be happy to recommend you. So start looking for deals, and make sure that you are very clear and concise when you offer these deals to investors. While you may have to give yourself several chances, once someone bites and the deal goes off, you will have exponentially expanded your networking ability and your buyer’s network.
• Recruit people online
  Many real estate investors keep a list of people who meet certain buying qualifications or who are interested in certain types of deals. They may have websites set up to glean these investors’ contact information and determine what they are interested in. Then, at the touch of a button, you can contact these investors with deals, and you know that they are interested because they gave you their contact information.

In the end, few things can beat a good reputation and personal contact when it comes to selling properties fast. Anything you can do to improve your odds at this by networking in any way possible will help you expedite your short term real estate investing.

Peter Vekselman has been successfully investing in real estate since 1996.  He has completed over 1200 real estate deals, owned a construction company, been a private lender, and owned a property management company.  Peter currently works with clients all over the US helping them achieve riches in real estate.

If you are interested in talking with Peter further about his private real estate coaching program please email him directly at peterv@pvretraining.com with your full name and all your contact information along with “why you need a mentor / coach”.

However, there are definitely a lot of short term real estate investors out there who would prefer to continue doing business simply by flipping properties, and without getting tangled up in short sale negotiations and the in’s and out’s of funding these deals. If you are among those investors, do not think for a minute that this means that you will no longer be able to invest in real estate. However, you will have to come to terms with the changes in the market that impact how you locate and sell the properties that you want to flip.

Many gurus are still teaching the “buy low, sell high” strategy. And they are perfectly right to do so. As long as you can do this, then you will be able to succeed in real estate investing – whether your preference is long term, short term, or just anything that makes you money. However, for a short term real estate investor, the additional caveat of “sell fast” or “turn fast” makes a big difference in this equation. After all, it is one thing to know how to invest in real estate, get good deals and then sell them. It is quite another thing to locate the buyers that you need on short notice.

If you want to simply flip properties, then networking is going to take on a level of importance that is probably unprecedented in your professional life – even if you have been networking on deals for years. The best way to sell a property fast is to have a buyer in mind, and preferable lined up, before you ever start negotiations of any type on the property itself. This gives you several advantages:

• Your buyer has more time to find financing
• You can promise your seller a fast closing
• You may be able to avoid the necessity of transactional funding all together
• You get your money faster

If you just want to flip, then having qualified buyers lined up at the ready will be critical to your success.

Peter Vekselman has been successfully investing in real estate since 1996.  He has completed over 1200 real estate deals, owned a construction company, been a private lender, and owned a property management company.  Peter currently works with clients all over the US helping them achieve riches in real estate.

If you are interested in talking with Peter further about his private real estate coaching program please email him directly at peterv@pvretraining.com with your full name and all your contact information along with “why you need a mentor / coach”.

At first, this might not really sound all that much different from the closings that happen today using transactional funding. However, there is one critical difference: in a simultaneous transaction, your name, as the real estate investor, never actually goes on the deed to the property. This can be advantageous for many reasons. It may help you circumvent seasoning requirements – if you are not required by the buyer’s lender to be on the deed. It can provide tax shelters for some people in some cases. It saves you money that you will otherwise have to spend on getting your own funding – however fast and temporary that funding may be. It also just plain speeds the process up.

Generally, real estate investors prefer simultaneous closings to those using transactional funding, if the option is available.  As a real estate investor, it is your responsibility to determine whether or not you need transactional funding or whether a simultaneous closing may be an option. In nearly all cases, if you have the option of doing the latter, it will save you time and money. However, neglect to do your due diligence, and your entire deal could fall through if you are working in an area or with a lender that requires that your name be on that deed before the deal is completed.

As a buyer, this is also an important distinction to understand. Your funding options will likely be limited if the seller is only willing to do a simultaneous closing, and does not offer or have access to transactional funding. You can use this distinction to help you determine up front whether or not you think a deal will work for you.

However, there are times that transactional funding alone will not work to smooth the short sale flipping process. This occurs in a deal in which there is a mandatory “seasoning” process, which requires a buyer to hold a property with their name on the deed for a period of days, weeks or months before they can sell. As you can see, this can seriously slow the flipping process, especially if you are dealing with a buyer who wants to move in immediately. Seasoning is another method that legislatively works to help prevent fraud, but many investors feel that it is also deliberately designed to make flipping difficult and target the real estate investing community. There are two ways to deal with seasoning:

1. Find a way to work with it
2. Only invest in areas that do not have seasoning laws

It appears that many governing bodies are starting to see the flaws in the seasoning process, and many lending and legislative bodies are taking steps to undo the regulations that require seasoning. However, at this point in time, it is still something that you must consider before you flip a short sale.

If you are required to season a property before selling, then you will have to obtain some source of funding that will enable you to hold the property for the required period. This may involve credit checks, but many investors have found that private money lenders are a good source of funding in these cases, just as they are for construction loans and rehab deals. It is vitally important that you find out the seasoning laws and rules in an area before you set up a short sale deal. Otherwise, you may find that you have devoted a lot of time and energy to a lost cause if you are unable to season the deal as required.

There are some cases in which you can creatively work out a way to enable a buyer to basically take possession of the property during the seasoning process. However, these methods must be carefully checked out with an attorney to insure that you do not jeopardize your own funding or your buyer’s in the process.

The best way to handle this new requirement is to obtain transactional funding. In short, you need “one-day credit.” Sound like a problem? Fortunately, it’s usually not. Here’s how it works, and why your credit score does not even have to be involved:

When you set up a short sale deal, you have a homeowner who is walking away from the property, and you have a buyer who is ready to pay the purchase price (plus whatever fee you have added on for your services in setting up the deal) agreed upon by you and the lender. This is an ideal situation for many short term real estate investors because it does not require the investor in the middle (you) to actually buy the property. However, thanks to this new lending law, if your name is not on that deed, then in many cases your buyer’s lender will not fund the deal.

So you need the funding for the deal, but you do not actually need a loan that you are going to keep up for any length of time. This means that you do not really need to go through the extended and often problematic process of having your credit checked, your income verified, and all the other hoops that you have to jump through to get a traditional loan. You just need the funding for about 48 hours so that you can purchase the property, get your name on the deed, then finish the deal with your buyer. Transactional funding does this. Basically, your transactional funding source sends you the funds so that you can do the deal with the lender. You are charged a number of loan points for this service. Then, you do the deal with your buyer, and the lender gets their money back (plus their fee) and you walk away with the difference.

Sound a little like superfluous work? It is. But understanding this type of funding will be critical to your success if you decide to flip short sales in the current lending environment.

In the past, real estate investors would do short sale transactions, and then sell the homes on the open market to make staggering profits. Some of my colleagues routinely made 20 to 50 thousand dollars on short sales in fairly short order once they obtained the deed to the property because people were   so eager to buy homes. However, since the real estate market took a dive, short sales have become much more common. At the same time, selling short sale properties has gotten more difficult because there are so many homes on the market. As a result, real estate investors have had to find new and innovative ways to flip short sales quickly.

There are a lot of ways to move short sale properties quickly, but before you get started with that, you need to understand some of the pitfalls that can arise thanks to more stringent lending requirements. If you do not factor in these new developments in lending practice and short sale transactions, you may end up with a property on your hands that you cannot get rid of, your short sale deal could simply fall through all together.

One of the biggest issues with short sales is lender’s requirement that the seller’s name be on the deed of the property. In a short sale, you are the seller, but if you are trying to arrange a quick flip, you may not have been planning to (or be able to) get conventional funding for the purchase of the property. Ideally, you would have your buyer bring in their funding, then purchase the home and you would get the difference. However, many lenders will not give your buyer funding unless you, the seller, are on the deed. This means that you also have to get funding for the short sale.

Sounds difficult? It certainly did complicate things for a while. However, there is a simple answer to this problem that will enable you to get the funding that you need (and your name briefly on the deed) so that you can finish your short sale flip. We’ll discuss this solution in the next lesson.

We’ve all heard “buy low and sell high” about a million times. There is no better time to “buy low” than in a “bad” economy. People are losing their homes and finding themselves unable to meet and make mortgage payments. They are willing to investigate routes to selling their homes that in better times, they might not have ever encountered. As a result, as a real estate investor, you can help a lot of people out while purchasing properties for yourself at pennies on the dollar.

However, if you are mainly interested in short term real estate investing, then the “buy low” is only half the battle. In order to successfully invest in real estate short term in a bad economy, you may have to look a little harder to find buyers that fit your “sell high” criteria. The source of buyers may surprise you: it will often be other real estate investors.

Real estate investors are unique because they are trained to see bad markets as arenas for potential, not something to be avoided like the plague. As a result, a real estate investor’s mindset about buying property will be totally different from a conventional buyer, and all you need to do is figure out how to show your investor that they will be able to make a profit on your property in order to convince them that it is a good deal. Essentially, you need to turn your “sell high” opportunity into something that to another real estate investor represents a “buy low” opportunity.

The best way to do this is to engage in some long-term planning before you ever invest in a piece of real estate. This does not mean that you need to actually buy that real estate for the long haul, but it does mean that you should consider the potential that a property has in the long haul. Figure out what would need to be done – actions taken, repairs made – in order to make that property yield big over the long term. Then, make that scenario part of your sales pitch. And if you do not end up talking yourself into keeping the property yourself for the long term, you likely will talk someone else into buying it in the process.

Of course, short sales are nothing new. However, in the volume and scale that they are currently being performed, they are garnering attention from various legislative bodies and regulatory committees. Now, to some extent, that is fine. I have no problem with responsible public officials working to protect everyone involved in real estate transactions. However, if you, as a real estate investor, are not aware of the local regulations governing short sales in a region where you do this type of investing, you can find yourself stuck with a property for months – or even years – if you lose your buyer in the process of adhering to these codes. Here are 3 things that you must know and factor in when you are flipping short sale properties:

• Will you have to season the property?
  In some states, you must hold a short sale property for a period of time before you can sell it. While waiting a month may not be a big problem, in some areas the span of time is effectively over 6 months. This can easily destroy a deal, and makes “flipping” in the traditional sense nearly impossible.
• Should you put your name on that contract?
  Many investors get around the seasoning issue by signing a separate payment contract with the end-buyer, and then conduct the short sale on behalf of the buyer. Make sure that you have good legal counsel that will let you know exactly where you can and cannot put your “John Hancock” and still have the short sale proceed as planned.

Is your end-goal for the property legal?
Of course, you are not in real estate investing to break the law. However, in some areas, there are very stringent rules governing to whom you can sell a short sale property. In many cases, this is to try and prevent investors from buying up properties cheaply. Fair? Absolutely not, and frankly it’s pretty bad business for the locale. However, you do not want to end up with a property that you did not want on your hands for months or years because the person you had lined up to buy it does not meet the qualifications. So make sure that not only is the actual transaction in order, but that you will not be violating any legislation when you pass the property on.

However, now times have changed. Short sale experts around the country have figured out how to streamline the process, and the massive influx of foreclosures and preforeclosures on the real estate market has forced lenders to start making this option more easily available to buyers. The result? Short sales can now be flipped in many cases in a way much similar to the way contracts and rehab properties are flipped.

This is not to say that you can do a short sale in a day. Only in very rare instances will this be an option. However, you very likely can complete the deal in a few weeks or a month or two, and during that time you do not actually have to own the property. What short sale experts are doing right now is targeting homes in preforeclosure, and then negotiating with the banks on a purchase price. While they are doing this, they are simultaneously advertising the property as a short sale to buyers. The end result is that about the time the short sale is completed, the third party (usually a real estate investor) has a buyer lined up to do the deal, possibly with the aid of some creative financing, or maybe through a traditional bank loan. Either way, the investor does not have to hold the property and wait for it to sell, and the homeowner still gets the benefits of getting out from under a mortgage that they no longer can handle – without a foreclosure on their credit.

If you have been avoiding short sales because you have heard how tedious and difficult they are, it may be time to rethink this attitude. While it would definitely be a stretch to say that you could do a short sale blindfolded, the market and the lenders have adapted, and short sales are one of the most significant burgeoning short term real estate investing opportunities on the market today.

Now, there are some classic ways that you can use to determine the location of potentially “hot” markets. You can look at the school systems, the proximity to job sources and the general proficiency of the public works in an area to determine if it is going to be attractive to the general public. You can also work with a real estate agent to chart the progress of homes for sale in an area, then do your best to buy in that area. These methods often work, but you can end up paying more for properties than you want if you are trying to buy in an area that is already in demand. Motivated sellers tend to be less visible in these areas because the homes are easier to sell, which can make the “buy low, sell high” rule more difficult to enforce.

One of the methods that I have seen more and more often in today’s real estate market may seem kind of backward at first, but it is definitely effective when it comes to flipping in an economy where there are many, many more deals than there are buyers. In the past, real estate investors usually recruited motivated sellers. Now, however, they are starting to recruit “motivated buyers” instead. A motivated buyer is someone that has the desire and the ability to buy a home, but cannot do so through traditional means. Their credit may be less than perfect, or they may not have the standard 20 percent down payment that most lenders are requiring. They may already own one property and are not able to qualify for additional traditional mortgages.

Whatever the reason, these motivated buyers need real estate investors’ help locating a property that fits their requirements and needs when it comes to the details of the property and to the financing. You can help – and you can make some “fast money” in the process by simply getting the deal that they want under contract, then selling them the contract. You make money for your expertise and ability to find creative ways to finance; the seller gets their property sold, and the motivated buyer has a home, usually with a decent interest rate and a low down payment, even though he or she could not qualify for a bank loan. Everyone is happy, and you did not have to wait a decade or two for your investment to come to fruition.

If you are interested in short term investing in today’s market, marketing yourself to motivated buyers can be a great way to generate some cash. Many investors have actually determined what types of homes those buyers want, then go ahead and get them under contract, with the contingency that they can find a buyer or the deal is off. This streamlines the deal even further and can make your time with any given property very short.