I work a lot with short-sales.... when I come accross this scenario, I usually explain that I cannot suggest they do not make payments, but if they get behind 1 payment or more, I may be able to help them by buying the home from them at a discount if the lender will approve them for the program. There a lot of other factors to consider though... FHA, VA or conventional? If loan is FHA or VA, there are strict guidelines that can kill the deal...and also keep it skinny profits. One thing is they usually only take offer of 82% of appraisal. Also, they are not able to do short sale if the appraisal comes in at 64% of loan balance...I have lost 2 deals last year due to that one...it has to go through HUD program and the lender cannot allow a short-sale. Also, there has to be documented hardship from seller to qualify, so make sure seller can qualify and is willing to do the work to prove it. They will need hardship letter, income statement of income and outgo, 2 months pay stubs, 2 months bank statements and 2 years tax returns. It requires more work to get out of the loan than to get into the loan, so the seller can kill a deal if they are not on board mentally and have proper expectations. They also can expect to make no money in the deal, while watching you make profit, so that have to understand and consent to that as well. Most short-sale opportunities have only a small margin of profit and few will meet most investor formulas to pay cash to lender for the property. I don't reccomend doing any short-sales unless you plan to do several. It takes time and experience to improve the odds of any success. And it takes volume to make it a profitable adventure. It is not like other REI deals, where you go into it knowing you will exit with "X" dollars. It is a gamble of time and money to hopefully make some money after months of dealing with the lenders and finding buyers to place into the property. It is usually not worth all that pain and trouble to maybe make a few thousand dollars. I reccomend partner with a local person who has a systematized process to handle many short-sales and the staff to assist with them to handle more and more deals. It may be more profitable to split the money and put into their system....so you can remain free to find more deals and don't get bogged down with the short-sales. That is how I do it. I also spend some extra time to learn it. The more I learned about it, the less I want to do it,so I just keep putting mine into my partners system. It works great for both of us. You did the right thing to stay in touch with her...they usually come back as the pressure of the lender gets poured on them....and it will. my .02cents
