Wholesaling Short Sales
This is a continuation of the Flip2Freedom podcast with Sean Terry. In this episode, Sean interviews Robinson Aries and finds out how wholesaling took him from bankruptcy to making bank.
Robinson: I called the banks and then I started negotiating with them. I actually negotiated a couple of my properties. Then I jumped into the short sale business, because I realized that there’s a lot of people, like me, going through the same situation. So I started doing short sales right after that. I said, this is a needs that I can explore. I was trying not to give up because I was losing my properties at the same time I was trying to find a way to get more income. So, I started doing short sales. Immediately, I negotiated a couple of my properties. I started doing short sales for other people. I made a joint venture with a company that was doing modifications, and any modification that they couldn’t make, it was going to be a short sale. So, I tied with them and they were sending me those short sales. I used to have 40 short sales on my pipeline. But, the problem was, as you know, short sales take forever.
Robinson: It used to take forever. Now it has changed a bit. So, the only way that you can close a deal is having a lot of people on your pipe. And that’s what I did. Some of them were cousins. Some of the banks were very tight back in that time. I was just going down; my income dropped by more than half. I was going nuts. I was losing money, losing all my savings. So, I said, “Oh my God, this is going crazy.” I was always trying to buy some of these properties and see if I could do some kind of sweep. I was going to seminars because that was the way to go back in 2008 and 2009. Everybody was talking about short sales and how to sweep short sales. So, I went to Tampa for a couple of seminars with Nathan, Chris, and Jason Medley. I was always educating myself, in order to be more efficient. Short sales were just so time consuming, so I stopped doing it because I started realizing that I’m just wasting my time, making very little money. I was searching around but at the same time, the property value in my area was going down. The qualifications that I did on my properties, it was not worth it anymore because even those property values were almost more than half.
Just to give an example, I held a couple of properties for $250,000, pre-construction. They went up to $340,000. I pulled some equity to hold those properties. So now my debt was around $340,000 on those properties, but the value of those properties, even though I did a modification with the banks, was going down. So, back in 2011, I was pretty stressed with this because I was seeing nowhere to go with it. The value of my properties were around $80,000 and I was owing $340,000.
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