Replies to This Discussion

Permalink Reply by Mike Linkenauger on February 6, 2010 at 5:53pm

Hi there Troy! For the most part, the Short Sale Specialist Network is completely against flips, unless the investor actually purchases the property, makes renovations, then sells. As a requirement for being in our network, we require agents to sign a network agreement agreeing not to do these things. I STRONGLY believe that there is almost no way to TRULY honestly and ethically do short sale flips in the manor that many investors demand doing them. I've debated this reality with the biggest and best schemers in the country.

Agents who work with our properties around the country aren't allowed to directly or indirectly purchase them, or play flip games with them. Click Here for our network agreement. This doesn't mean that some of them don't do it with other properties, OR that everyone on this site is part of our network or agrees with the way I see things.

Your first question proves my point. If there is 1.)even the possibilty of the deficiency being repaid or 2.) an agent is trying to profit off the misfortune of ANY homeowner, than there is no way to have a fiduciary relationship with them or look out for ANYBODY'S interests but their own. I don't care what somebody signs. There are countless other reasons, but thats part of my two cents.

Despite what the schemers say, I've spoken with several presidents and loss mit. department heads of the major banks who see most of the short sale schemes as fraudulent.

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Permalink Reply by Troy Sage on February 7, 2010 at 1:26pm

Mike,

Thanks for the reply. You have defined exactly what I was looking to point out. I'm so tired of investors and agents playing games that hurt the seller.

Looking forward to a very long relationship with you and the Short Sale Specialist Network.



Mike Linkenauger said:

Hi there Troy! For the most part, the Short Sale Specialist Network is completely against flips, unless the investor actually purchases the property, makes renovations, then sells. As a requirement for being in our network, we require agents to sign a network agreement agreeing not to do these things. I STRONGLY believe that there is almost no way to TRULY honestly and ethically do short sale flips in the manor that many investors demand doing them. I've debated this reality with the biggest and best schemers in the country.

Agents who work with our properties around the country aren't allowed to directly or indirectly purchase them, or play flip games with them. Click Here for our network agreement. This doesn't mean that some of them don't do it with other properties, OR that everyone on this site is part of our network or agrees with the way I see things.

Your first question proves my point. If there is 1.)even the possibilty of the deficiency being repaid or 2.) an agent is trying to profit off the misfortune of ANY homeowner, than there is no way to have a fiduciary relationship with them or look out for ANYBODY'S interests but their own. I don't care what somebody signs. There are countless other reasons, but thats part of my two cents.

Despite what the schemers say, I've spoken with several presidents and loss mit. department heads of the major banks who see most of the short sale schemes as fraudulent.

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Permalink Reply by Joseph C. Alfe on February 7, 2010 at 6:52pm

One of my clients is an investor. He discloses very clearly to all parties( seller/lender) that he is intending to make a profit. As far as the lender is concerned, he submits an offer, and if it happens to be below value, and the bank accepts it, that is their problem. An attorney told me that the very fact that if a lender approves a purchase for below market value, that they are well aware that the buyer will make a profit at some point in the future. Also, We negotiate full debt releases. If the lender wants to pursue deficiency, he either settles that deficiency with a buyer cash contribution or he will not buy the property. He will not profit at someone elses expense. If he cannot buy the property, he then lists and sells on the open market. Most investors walk away at that point and I don't think that's ethical. Bottom line is that there are some good investors out there that do help the sellers.

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Permalink Reply by Mike Linkenauger on February 7, 2010 at 10:42pm

Ask any agent who does alot of BPO's how many times they've had an investor: 1.) argue the value or demand they value it at a certain price, 2.) attempt to bribe them or 3.) try to send an attractive woman to meet the BPO agent (like one of the most popular programs suggest). Manipulation is a form of dishonesty. EVERY investor short sale program teaches how to manipulate deals, especially property valuations, to their best interest, at any cost. Also, many of the lenders demand "arms lenght affidavit's" be signed. Many of these have the agents signing that the property is being sold for market value. If it is resold 30 minutes later, this is NOT market value. Misrepresenting the value of real property is a Realtor Code of Ethics violation as well.

Some lenders in deficiency states are demanding all or part of the deficiency be repaid in some cases. Demanding the buyer brings money to settle the deficiency, or the deal falls apart, is a horribly thing to demand a buyer do after a long wait for approval, and will dramatically limit the pool of potential buyers for a property. Something that is NEVER, NEVER in ANY sellers best interest.

Most of the investors really bring NOTHING of value to the transaction. Nothing that a good, experienced, and properly training agent/brokerage company can't do all by themselves. Another reason why the Short Sale Specialist Network demands agents in our network NOT use 3rd parties to mitigate short sale deals. There is no regulation and nothing to loose (like a brokerage license). I know you are trying to make a living Joseph, but you don't HAVE to work with people who you don't believe are ethical. I know I don't.

We don't need investors the majority of the time anymore in short sales, after all, they are only trying to find a REAL buyer to flip it to, I know how to market and have no problems finding those buyers myself. and when my tax dollars go to pay to bail out these lenders, these flip investors profit at MY expense. Again, I'm not talking about REAL investors who use REAL capital and take REAL risks. I'm talking about the flippers who sell a few minutes after closing (ONLY if there is a REAL buyer).

Using the practices that most of the short sale schemers demand using, there is no such thing nor is it humanly possibly to be "good". Thats why they try to bribe Realtors with 6% or 9% commissions to get on board with them and let them have their way.

Topic I'm pretty passionate about that hits a spot with me!!

"nuff said!!

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Permalink Reply by Troy Sage on February 7, 2010 at 11:22pm

Again, Well SAID Mike. I totally agree with you. I'm sick and tired of the Agents and Investors trying to make a dime ( or honestly in most cases thousands of dollars) by being dishonest.

Joseph, I'm sorry but I have to disagree with you. I have yet to meet an investor that honestly helps any seller. The investor is in the game to make money, not help the seller. Matter of fact, as Mike has said, most investors try to bribe Agents by offering double commission or some kind of equity split after the home has been sold to the "End Buyer". The agent that has the home should be looking for the "End Buyer", not an option or trust scam, that eventually gives the investor a lot of money for owning the property for a day, then selling to the "End Buyer". It's a scam, and I'm tired of all the scams.

As agents we have a fiduciary duty to the seller, and we MUST protect the seller from these blood sucking scams.

Thanks again Mike! I see we are on the same page.

Mike Linkenauger said:

Ask any agent who does alot of BPO's how many times they've had an investor: 1.) argue the value or demand they value it at a certain price, 2.) attempt to bribe them or 3.) try to send an attractive woman to meet the BPO agent (like one of the most popular programs suggest). Manipulation is a form of dishonesty. EVERY investor short sale program teaches how to manipulate deals, especially property valuations, to their best interest, at any cost. Also, many of the lenders demand "arms lenght affidavit's" be signed. Many of these have the agents signing that the property is being sold for market value. If it is resold 30 minutes later, this is NOT market value. Misrepresenting the value of real property is a Realtor Code of Ethics violation as well.

Some lenders in deficiency states are demanding all or part of the deficiency be repaid in some cases. Demanding the buyer brings money to settle the deficiency, or the deal falls apart, is a horribly thing to demand a buyer do after a long wait for approval, and will dramatically limit the pool of potential buyers for a property. Something that is NEVER, NEVER in ANY sellers best interest.

Most of the investors really bring NOTHING of value to the transaction. Nothing that a good, experienced, and properly training agent/brokerage company can't do all by themselves. Another reason why the Short Sale Specialist Network demands agents in our network NOT use 3rd parties to mitigate short sale deals. There is no regulation and nothing to loose (like a brokerage license). I know you are trying to make a living Joseph, but you don't HAVE to work with people who you don't believe are ethical. I know I don't.

We don't need investors the majority of the time anymore in short sales, after all, they are only trying to find a REAL buyer to flip it to, I know how to market and have no problems finding those buyers myself. and when my tax dollars go to pay to bail out these lenders, these flip investors profit at MY expense. Again, I'm not talking about REAL investors who use REAL capital and take REAL risks. I'm talking about the flippers who sell a few minutes after closing (ONLY if there is a REAL buyer).

Using the practices that most of the short sale schemers demand using, there is no such thing nor is it humanly possibly to be "good". Thats why they try to bribe Realtors with 6% or 9% commissions to get on board with them and let them have their way.

Topic I'm pretty passionate about that hits a spot with me!!

"nuff said!!

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Permalink Reply by Mike Linkenauger on February 7, 2010 at 11:39pm

Couldn't agree with you more Troy! For me, its a pretty easy line to draw in the sand. You should read this blog post of mine, boy I really didn't make any friends with this one! If anything, looking back I took it to far, but what excellent entertainment!
http://activerain.com/blogsview/1291605/the-10-option-contract-shor...

I definately argued with some of the best cons on that blog post, if you want to add anything I may open it up at the end for comments...

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Permalink Reply by Mike Linkenauger on February 7, 2010 at 11:41pm

Hopefully Tony we won't have to deal with the scammers to much longer, with agents learning more and more and getting short sale training finally across the country. Another motive for us comming up with a good training program.

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Permalink Reply by Joseph C. Alfe on February 8, 2010 at 1:18pm

Troy, the reason that I work with this particular investor, is that I've personally seen him pull money out of his own pocket to settle deficiency on loans. This means that the buyer was able to close this transaction owing no deficiency or promissory note, so tell me, what is the better offer? 200K that leaves the seller hanging with a deficiency balance, or 185K and the seller is totally released for liability? It's not always the highest offer that is best for the seller.

I do agree with you and Mike that 99% of investors don't do this and are not worth working with, but good ones are out there.

Troy Sage said:

Again, Well SAID Mike. I totally agree with you. I'm sick and tired of the Agents and Investors trying to make a dime ( or honestly in most cases thousands of dollars) by being dishonest.

Joseph, I'm sorry but I have to disagree with you. I have yet to meet an investor that honestly helps any seller. The investor is in the game to make money, not help the seller. Matter of fact, as Mike has said, most investors try to bribe Agents by offering double commission or some kind of equity split after the home has been sold to the "End Buyer". The agent that has the home should be looking for the "End Buyer", not an option or trust scam, that eventually gives the investor a lot of money for owning the property for a day, then selling to the "End Buyer". It's a scam, and I'm tired of all the scams.

As agents we have a fiduciary duty to the seller, and we MUST protect the seller from these blood sucking scams.

Thanks again Mike! I see we are on the same page.

Mike Linkenauger said:

Ask any agent who does alot of BPO's how many times they've had an investor: 1.) argue the value or demand they value it at a certain price, 2.) attempt to bribe them or 3.) try to send an attractive woman to meet the BPO agent (like one of the most popular programs suggest). Manipulation is a form of dishonesty. EVERY investor short sale program teaches how to manipulate deals, especially property valuations, to their best interest, at any cost. Also, many of the lenders demand "arms lenght affidavit's" be signed. Many of these have the agents signing that the property is being sold for market value. If it is resold 30 minutes later, this is NOT market value. Misrepresenting the value of real property is a Realtor Code of Ethics violation as well.

Some lenders in deficiency states are demanding all or part of the deficiency be repaid in some cases. Demanding the buyer brings money to settle the deficiency, or the deal falls apart, is a horribly thing to demand a buyer do after a long wait for approval, and will dramatically limit the pool of potential buyers for a property. Something that is NEVER, NEVER in ANY sellers best interest.

Most of the investors really bring NOTHING of value to the transaction. Nothing that a good, experienced, and properly training agent/brokerage company can't do all by themselves. Another reason why the Short Sale Specialist Network demands agents in our network NOT use 3rd parties to mitigate short sale deals. There is no regulation and nothing to loose (like a brokerage license). I know you are trying to make a living Joseph, but you don't HAVE to work with people who you don't believe are ethical. I know I don't.

We don't need investors the majority of the time anymore in short sales, after all, they are only trying to find a REAL buyer to flip it to, I know how to market and have no problems finding those buyers myself. and when my tax dollars go to pay to bail out these lenders, these flip investors profit at MY expense. Again, I'm not talking about REAL investors who use REAL capital and take REAL risks. I'm talking about the flippers who sell a few minutes after closing (ONLY if there is a REAL buyer).

Using the practices that most of the short sale schemers demand using, there is no such thing nor is it humanly possibly to be "good". Thats why they try to bribe Realtors with 6% or 9% commissions to get on board with them and let them have their way.

Topic I'm pretty passionate about that hits a spot with me!!

"nuff said!!

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Permalink Reply by Troy Sage on February 8, 2010 at 1:22pm

Joseph, I totally understand where you're coming from. I wish there were more agents like you working with honest investors.

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Permalink Reply by Mike Linkenauger on February 8, 2010 at 2:29pm

I have one or two investors I work with that I'll refer out to work with properties that are in horrible condition and will not get regular financing. I'm talking about the kind of investors who will take the capital risk and purchase the property and then make renovations to it. THOSE investors are few and far between nowadays, and unfortunately there are MANY "schemers" out there.

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Permalink Reply by Randy Stevens on February 9, 2010 at 12:51am

Unfortunately, I have to agree as well that there are many more dishonest investors out there than I care to admit. But I do know that there are honest and ethical investors out there. Its the ones outlined in this thread that give the good ones a bad name and I'm sorry to say that they are vastly outnumbered. I work with investors regularly and do invest myself. I absolutely will not work with or associate with an investor who does not operate above board in all aspects of the transaction. Integrity and a clean reputation is far more important than a quick buck.

Many investors out there are the fly-by-night type that usually come and go. The unfortunate situation is that it seems as though more are coming than going because of the obvious opportunity to capitalize on the market right now. People see dollar signs and come flocking. These are the "schemers". These are the ones that make it extremely difficult for the ethical investors out there who really do do the right things. Its sad that all investors are grouped into this class of "scum" but I guess that is the nature of the game (kind of like the one or two good politicians out there--uh, oh here we go... :)

It is true, Troy, that the investor is in it to make money. Thats obvious. But we don't work for free either. I am not opposed to anybody making money as long as they provide good and valuable service. Like you said, FULL DISCLOSURE is the key and as long as Im involved in any short sale situation this is an absolute must!

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