For rehab or fix and flip investors, finding properties with the largest spreads is very important.  There is a lot of competition among rehabbers; combine that with a smaller inventory of bank owned properties for sale, and you can see that finding a highly profitable flip may require some out of the box thinking.

One option to consider these days is to target short sale properties rather than (or in addition to) bank owned properties.  Short sale properties are not as sought after, often times due to the longer process involved in getting approval from all lenders involved and closing.  Lucky for us the banks are starting to streamline the process a bit more, with many homes being pre-approved at a particular price point for short sale.

When looking to target short sale properties, there are a number of strategies a real estate investor can employ to find the right deals.  This morning I stumbled across a very interesting article on Realtytrac that addresses this issue, and offers some information that could be valuable to real estate investors looking to purchase short sales at the maximum discount available.

You can read the full article here , but the most interesting part that I found was the list of the top seven banks for short sale bargains.  These banks are selling properties at pre-foreclosure sales prices that average between 25-40% below market value.  For investors looking to target short sale properties, knowing what banks are offering the greatest discounts on a regular basis could really give you a leg up on your competition!

Here is the list according to Realtytrac:

1. PNC Financial Group Avg. Pre-Foreclosure Sales Price: $133,015 Avg. Percent Discount: 40% Avg. Days to Sell: 151

2. Government Entities (Fannie Mae, Freddie Mac and HUD) Avg. Pre-Foreclosure Sales Price: $127,618 Avg. Percent Discount: 42% Avg. Days to Sell: 154

3. Ally Financial (Formerly GMAC) Avg. Pre-Foreclosure Sales Price: $143,410 Avg. Percent Discount: 35% Avg. Days to Sell: 188

4. Ocwen Financial Avg. Pre-Foreclosure Sales Price: $126,071 Avg. Percent Discount: 43% Avg. Days to Sell: 168

5. Sun Trust Banks Avg. Pre-Foreclosure Sales Price: $151,308 Avg. Percent Discount: 32% Avg. Days to Sell: 207

6. Bank of New York Mellon Avg. Pre-Foreclosure Sales Price: $155,488 Avg. Percent Discount: 30% Avg. Days to Sell: 283

7. Bank of America Avg. Pre-Foreclosure Sales Price: $166,389 Avg. Percent Discount: 25% Avg. Days to Sell: 223

Hopefully this information is helpful to our readers.  Remember, I’m able to help with most hard money loan requests in the state of California, including hard money for rehab transactions.  If you would like to learn more about the rehab lending we can assist with, please visit our rehab lending page.  In addition, you may find a use for our rehab profit calculator, for use with hard money and gap funding.  Good luck!