THE CAMBRIDGE STORY? ANATOMY OF A SHORT SALE

On a postlet on the side of this blog is a property 2834 Cambridge Street in Philadelphia, Pa. It is a property in Brewerytown, a gentrifying neighborhood near the Philadelphia Art Museum. It is a short sale property that is being rehabilitated by a cooperative effort of Prime Financial Group LLC and Top Tier Holdings LLC. It is also the perfect example of how a short sale works.

 The property was purchased  by the previous owner for $235,000.00 in 2007. It had been rehabbed by the seller in 2007, but poorly executed.  After the real estate bubble burst the owner could no longer afford to pay the mortgage and it fell into delinquency. Bank of America sold the mortgage to IBM LPBS who pushed forward with a foreclosure. Christine Sherbert, founder of the Montgomery County Real Estate Investors Group,  a well known, experienced investor, and re-habber, located the property for the short sale team. In  April of 2011,  Top Tier Holdings LLC made an offer on the property to IBM LPBS for significantly less than the mortgage pay off amount, of course it was rejected and Prime Financial commenced short sale  negotiations on the property on Top Tiers behalf.

IBM LBPS had an interior BPO (Brokers price opinion) for twice what Christine,Top Tier and Prime believed the property was worth. Of course the negotiations bogged down. Prime challenged the BPO and submitted a value challenge, with accompanying comparable prices, and analysis, to IBM LBPS, ultimately convincing IBM to sell Top Tier the property for a fraction of the original IBM value.

Settlement on the property was held in July of this year. With in two days the renovations began on the property by the contractor First Development Corp. The complete exterior/interior rehabilitation will take 6-7 weeks. The funding was provided by a private individuals self directed IRA, with modest cost,s and reasonable interest rate.

At the conclusion of the rehabilitation the property will be worth substantially more than Top Tier Holdings paid IBM LBPS. Jennifer Grosskopf of Coldwell Banker an experienced real estate agent has been engaged as the listing agent for the property. The property will be resold before the snow falls on the ground. All of the participants in the process will profit handsomely for their endeavors.

Cambridge is an example of how team work between an  investor,  short sale negotiator, builder, and Realtor  can result in a successful project. Time and time again I hear experienced real estate investors say; "I hate short sales", not my bag baby.  But with team work, and creative thinking, they can utilize this product to share in a handsome profit. Before you write off the opportunities in short sales, consider the power that team work can bring to your real estate endeavors!