New Short Sale Strategy - Buy the Note

Granted, this may not be new to YOU.  But it is new to me, and to most investors and real estate agents that I have talked to about this topic - buy the mortgage note on a short sale property.

Basically, the investor follows theses steps (just an outline, not detailed):

• Find a short sale candidate - quickest way is via real estate agent's current short sale listings.
• Cultivate relationship with the agent or work with your current real estate agent contacts.
• Get a "quick sale price" estimate from the real estate agent.
• Have the seller agree to transfer the deed into a trust.
• The seller signs an authorization to release information letter, asking the bank to sell you the note.
• You contact the lender's department that routinely handles the selling and buying of mortgage paper.
• Make an offer to buy the note at a discount.
• Close on the note purchase and complete the deed-in-lieu of foreclosure transfer of title to you.

If all goes smoothly, the process could complete within 3 to 4 weeks.  How's that for quick turnaround?

I'm in the process of working on 4 possible deals.  Eager to complete the first one, of course.  Will this work?  I also will attempt this with a property that is not yet in foreclosure, sellers are not behind on payments.  In fact, they have plenty of money.  But they need to move ASAP and the house value is less than what they owe.  The owners are seriously thinking about doing a strategic default.  My plan may be a very good alternative.  Stay tuned and check back often for my progress updates.