Home Selling in Los Angeles>Question Details

Justasking, Other/Just Looking in San Bernardino, CA

If a seller has three or four rental properties, can he get a short sale on any of them? He is upside down on them as well as his principle home.

Asked by Justasking, San Bernardino, CA Thu Feb 3, 2011

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Hello Justasking...
In theory, yes, the seller "could" get a short sale on all the above properties, however, there are a number of things that the seller will need to do to get the approval... The sellers (hardship letter, profit & loss statement, financial statement, bank statements and last 2 yrs tax records) are all going to have to show the sellers hardship and support their claim that they can no longer afford the properties.

Also, the "debt forgiveness relief act" will only apply to the sellers personal residence, so they should speak to their accountant regarding the rental properties... there will probably be tax liability on those as well.

I am a shortsale specialist and would be happy to consult and guide you further in person if the need arises. Please contact me if you or the seller are considering your selling options. Thank you.
Sincerely,
Richard "RJ" Kas (SFR, SRES)
"Representing the finest properties from Los Angeles worldwide"
KAS Properties - Coldwell Banker Previews International - Beverly Hills East
9388 Santa Monica Blvd, Beverly Hills, CA 90210
310.859-5334 office - 310.488.9826 mobile - 310-273-0670 fax ATT: RJ
RichardKas@gmail.com - http://www.RJforLA.com - DRE: 01352771
Sellers Buyers Investors Leasing Consulting
0 votes Thank Flag Link Mon Mar 7, 2011
Short sales are approved by the lending institution that is carrying the mortgage on the property and will approve on a per situation basis. No one can give you a definite answer on whether someone can get a short sale on a property.

Hope this helps.
Web Reference: http://www.DavidNewHome.com
0 votes Thank Flag Link Mon Mar 7, 2011
.........YES!.............
0 votes Thank Flag Link Sun Feb 6, 2011
It depends. You can list any properties that is upside down in fiance for Short Sale, however, not every property will qualify to be sold as a Short Sale. You need to have a hardship and financially proven that you need to do that. Some properties have so many different liens that the chances are for all lien holders to agree to short sale may not be high. To the lien holders, it is all about the net amount. If the lien holders feel foreclosing it benefits them more than Short Sale, they will do that. Best way is to hire an agent who is very familiar with Short Sales to help you. Most clients hire agents because they want to hear what they want to hear, not reality. In those cases, in the end, the ones that get hurt the most is the homeowners themselves.
0 votes Thank Flag Link Fri Feb 4, 2011
Yes. You can shortsale the rental properties. The only thing I would advise is speaking to your accountant regarding tax liability. The debt relief act is for primary homeowners and does not cover investment properties, so you will receive 1099 upon the sale of these. I happen to perform many shortsales throughout California, so I would be happy to help and advise.
Sincerely,
Richard "RJ" Kas (SFR, SRES)
"Representing the finest properties from Los Angeles worldwide"
KAS Properties - Coldwell Banker Previews International - Beverly Hills East
9388 Santa Monica Blvd, Beverly Hills, CA 90210
310.859-5334 office - 310.488.9826 mobile - 310-273-0670 fax ATT: RJ
RichardKas@gmail.com - http://www.RJforLA.com - DRE: 01352771
Sellers Buyers Investors Leasing Consulting
0 votes Thank Flag Link Fri Feb 4, 2011
Yes, you could do a short sale on all 4 properties.

Even if you have a good income, the financial hardship can come into play because I doubt you're able to rent out all the rental properties & break even every month. That's the hardship, secondary to the places being upside down.

With the rental properties you could face an income tax liability on the negative amount, since they are not your primaries. It may still be possible to get the banks to NOT pursue you in the future for deficiency judgment on the rentals, that is the real key. Depending on your financial situation it may still be possible to prove insolvency for any tax liability on the rentals. You'll need to check with a CPA on this.

Feel free to email me directly for further assistance, even if you haven't officially decided to short sell these properties, I can at least give you a good idea on what the current values are vs. your loan amounts & let you know what the possible income tax liability may be. Between my partner & I we have closed over 500 short sales.

EmilyKnell1@yahoo.com
562-430-3053 cell
Realtor Since 1996
0 votes Thank Flag Link Fri Feb 4, 2011
I don't see why not if the bank is willing to do a short sale.

Lori Matson
Keller Williams
310-994-5894
0 votes Thank Flag Link Fri Feb 4, 2011
Yes... the bank is basically confronted with an inevitable foreclosure or with mitigating their loss though approving a short sale... they will choose the lesser of two evils...

Best of luck, and move on it fast... start rebuilding your portfolio... it was a tough round, but the fight is not over...

Ron Escobar, MBA
Broker & General Contractor
Web Reference: http://shortsalecentral.org
0 votes Thank Flag Link Fri Feb 4, 2011
Yes, a seller can short sale all of his rental properties, as well as, his primary residence. We are a professional short sale service and would be happy to explain the process to you. Please call us directly to discuss your specific situation. Our services are FREE to homeowners. We look forward to hearing from you.

Eli Givoni, Director
Short Sale Department, LLC
561-361-1909
info@shortsaledept.com
http://www.shortsaledepartment.com
Serving all 50 states
0 votes Thank Flag Link Fri Feb 4, 2011
Where ever there is a hardship, there is away to negotiate with the lender to accept a short sale. To explore this further, feel free to contact me directly, or check out other posts here on Trulia - a great site for information. There is no cost or obligation associated with obtaining more specific, detailed information based on the exact facts of the seller's situation.

Make sure the listing agent chosen has strong negotiating skills. And note, many lenders, including Bank of America, frown on the use of outside negotiators. You want to make sure that the listing agent does their negotiations in-house for the highest probability of success.

Good luck in helping your seller friend. Dare to Dream.

Shel-lee Davis, QSC®
Certified Distressed Property Expert – CDPE®
Short Sale & Foreclosure Resource – SFR®
Certified HAFA Specialist – CHS®
SSG Pro®
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
424-2HELP12 (424-243-5712)
myrealestateanswers@gmail.com
http://shel-lee.listingbook.com
0 votes Thank Flag Link Fri Feb 4, 2011
Yes, it is a very good possibility that you can short sale your properties. However, contact your bank to inquire about the home loan modification process, particularly for your primary residence. They may be able to lower your mortgage payment, but it all depends on what type of hardship you have. The short sale process rules are changing every day, but I have seen some banks trying to work diligently with homeowners to help them modify their loans and if not, allow them to use the option of short sale. Call and ask your lender about the HAFA and HAMP programs for homeowners with hardships. Best Wishes.
0 votes Thank Flag Link Fri Feb 4, 2011
Justasking being upside down is not enough. There has to be financial hardship involved. If the only reason for the short sale is that they are worth less now than when they were purchased join the club. If the properties do not cover themselves then the owner was engaging in speculation and a lot of people have been burned over the years betting on a future increase in value.
0 votes Thank Flag Link Fri Feb 4, 2011
Yes, you can, however you will need an agent that is experienced in dealing with this type of property and handling a short sale for this type of property. You will need to have a valid hardship for a short sale, just being upside down is not a valid hardship. I have closed short sales on properties like, feel free to call me anytime with any questions you may have.

Have a great day,
Heather Paul
Coldwell Banker
(424)625-1037
Web Reference: http://www.heatherpaul.net
0 votes Thank Flag Link Thu Feb 3, 2011
I have seen it done before, it took a long time because of all the lenders, appraisals,and parties involved. They were all under 4 units. Consult a professional! Best of luck!
0 votes Thank Flag Link Thu Feb 3, 2011
He can do a short sale on any or all of them. It is up to the bank to approve, but there is no specific reason they would turn it down just because he has multiple properties.


Richard Schulman
Short Sale Expert
#1 Listing and Selling Agent
Keller Williams
310-482-0173
schulmanrd@yahoo.com
0 votes Thank Flag Link Thu Feb 3, 2011
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