The Case of the Hostile LM

Thursday, October 29th, 2009 | Uncategorized

Have you every had one of those cases that you just knew wasn’t going to make it, then you tried something crazy, and it worked?

One of our coaches recently had such a case, fought through some challenges with a bitter LM, and got it closed for a spread that most people make in one year.

The subject property was 3 bed, 1 bath SFR in Long Beach, Ca. The homeowner, a struggle real estate agent.  The foreclosing lender, GMAC, which held the first (439k) and the second (48k).

The case was submitted in the first week of May. BPO was scheduled two weeks later –– a good start. Along the way, there was the usual sending and resending of docs to the LM, as the bank somehow kept losing the paperwork.

In June, it was learned that the bank’s number was 241k. The offer was raised to 200k, but the LM balked and admonished not to send in anything below 241k or the case would be closed.  In early July, an offer for 241k was sent to the bank, with the hope that an end buyer could be found for near 280k.

Trouble was, there wasn’t an end buyer to be found, and the LM wasn’t willing to provide an extension.  Our coach and his negotiator pushed back, and the LM was willing to reconsider the amount, but only if sufficient documentation was submitted supporting a lower number than the 241k they had requested. A team BPO was completed with additional reference material submitted, and the LM ordered two more BPOs, which were completed in early August.

Then it got weird.  After two weeks of attempting to contact the LM, post-BPO, the LM stated unequivocally that the BPOs did not take place and that because a full appraisal didn’t exist for the property, the file would be closed.

So what did our intrepid coach do?  Knowing that the sale date was in two weeks (mid-September), he had his offer rescinded, and sent in another offer with supporting evidence in his own name with the hope that it would go to a different LM.  The new offer was for 160k and as luck would have it, a new LM was assigned to the case. That offer amount was quickly raised to 190k net – the amount requested by the new LM – and the sale date was postponed and the approval given!

During this time, a cash buyer was found for 255k!

The transaction closed in mid-October. When fees, commissions, and all the odd and ends were paid, the net to our coach was 40k!

The point?  This case was dead in the water: with a hostile LM, a high asking price, and no end buyer to be found, the outcome wasn’t promising.  However, by doing some extra work, and gambling with a lower offer, the transaction came together and the transaction completed.

Our coaches and clients find strange challenges in the real estate investing business, and it’s probably why so many of us are hooked (along with the paychecks!)

To get a sense of what others are running into, and the solutions they are finding, check out Silver Coaching and peruse the forum – where others are constantly sharing ideas and how to solve them! (go to http://strategicrealestatecoach.com/members/).

Also, as I posted earlier in the week, we’re opening our high end coaching program, Platinum, and will begin taking new coaching clients soon.  We only do this once a year. Each coaching client will be paired with a coach, like the one mentioned above.  If you want to jumpstart your real estate investing business, this is the best approach. ~Josh

Join SREC’s Silver Coaching for the absolute best free training anywhere!

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