Short Sale and Keep Your Income Producing Property

Short Sale Multifamily Property

Your rate is high, you may be facing foreclosure. Your lender will not work out a new plan to reduce your payments. Today there is a way out to reduce your payments make money with positive cash flow and keep your property. It is a short sale!

That does not make sense you may say. If you sell your property for less than you owe your current mortgage company, you no longer own the property. You sold it.

This is true.

Next if you sold it how can you receive a positive cash flow on property you just sold?

Sale Lease Back

There are companies that will buy your home from the bank if the bank is willing to negotiate a reduced price no more than 60% of the market value. The hedge fund will by at from you with the bank accepting less than what is owed to them. This is called a short sale. The company will then allow you to lease back your income producing commercial real estate based on the lower price than they paid for it. This allows you to have lower payments and profit from the increased cash flow. Though you no longer own the property the hedge fund will execute a lease back agreement that gives you the option to purchase the property within 10 years based on the value you originally owed on the property. This is a win – win win proposition.

Win Win Win

The bank wins even though they accepted less money than what was owed to them because they got a non performing asset off of their books. Too many non performing assets reduce the value of the bank and the value of its stock, increases regulatory activities and causes to have more assets in reserve than they would otherwise be required to. There is also no telling the cost to foreclose and maintain the property before it is actually sold.

The hedge fund wins as they purchase an income producing commercial property far  below value. The asset produces enough income to easily provide a good return on its investment. The sale lease back puts free management in place and a promised appreciated return on their investment of at least 60%.

The property owner wins because they are losing the property to foreclosure and the property is currently not generating the income to sustain the current mortgage. Now they can receive a positive cash flow based on much lower financing payments. Otherwise the owner would lose all rights to the property and no income. The sale lease back arrangement allows the property owner to regain ownership in 5 to 10 years.

Finally

This short sale / sale leaseback program for income producing commercial real estate is a good opportunity for real estate investors to keep their property and increase their profitability even after a short sale transaction.

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