This is the video included in the huffington post article about flippers.
While it is possible to flip short sales and close concurrently, trying to get everything to align is tougher than it looks – and why these guys get a bad name. They make it sound easy!
Weren’t Double Escrows outlawed in the 1980’s in California? I know the escrow companies were being watched–I knew a guy that was trying to do a double escrow a few years ago and the escrow company that handling his purchase refused to allow him to use their escrow company to sell while he was still in escrow purchasing–he had to sell it with a 2nd escrow company that had no knowledge that he was not yet on title.
This sounds like what Tom Tarrant calls “wholetailing”:
http://tomtarrant.com/case-study-what-is-real-estate-wholetailing/
It seems like it would be difficult to essentially flip a house with no improvements, on a very tight schedule, and still make a profit, but he does it, apparently.
These type of guys approach me all the time since I list many short sales. Don’t walk, run away from this type of transaction.
#2. You beat me to posting that Tom Tarrant article. Tom says right in the article that 1) doing a double escrow is tricky and 2) Wholetailing is not double escrow but actually buying the house that meets the right price numbers, 55 percent of actual value.
Anyway Jim is right. It’s very bad for these folks above to make the process sound easy. The concept is easy, offer someone a promise to pay 55 percent of actual value (you are so smart you know the actual value and they don’t) and then find a buyer to pay 70 or 80 percent of actual value and everybody wins. But HOW exactly did you arrive at the actual value? I have total trust that Tom Tarrant gets that actual value right almost every time. Would I trust the fast talking greedy eyed folks on the video above to get the actual value right? Um….NO. Should the folks above even be involved the RE market and encouraging others like themselves to be involved? Well it’s a free country I guess.
Why bother? It’s much easier to mine gold. You just go to the river, get a pan, and sort all the gold out. It’s fast, it’s easy, and you don’t need any money or credit to do it.