ABC Transactions

On the front page of the Arizona Republic their was a article talking about ABC type transaction.  Not to summarize too much, it talked about how upset the real estate community is over these types of transactions.  They felt how should an investor be able to negotiate a deal with a bank, via short sale, and then resale the property within a couple of weeks if not sooner and make a profit.  I find that very troubling.  It’s called capitalism.  It’s what America is known for.  As an investor who does these types of transactions with full disclosure, I feel that once again the investor is getting a bad rap.  Not that I really care what people think, but this reporter really got it wrong.  In the article it talks about how the ABC transaction hurts comps.  Here’s the truth…..The asset was probably going to become either a bank owned property or go to sale at the auction.  It’s going to hurt comps regardless.  But there’s hope.  As a fix-n-flipper, I buy these bank owned homes and rehab them and sell them for top market price.  So a new comp is established.  Thus raising home values.  A distressed property is just that, distressed.  I find it curious that everyone wants to beat up the investor.  Most people I work with doing a ABC deals are very happy.  I write up an offer immediately for them and start working the process of a short sale.  Unlike Realtors, who list the property in hopes of getting an offer.  Because I can close for cash, banks want to work with me.  CASH is KING….It allows me to buy for cheap.  At the same time I’m negotiating the short sale, I’m marketing the property to a end user.  I’m able to do this because I take an option on the property and record it with the County Recorder.  This gives me an equitable interest in the property.  I disclose my whole process to the people I’m helping and the banks.  I also make it very clear that I intend to make a profit.  People really don’t care, they just want to get it done.  ABC deals are a great way for investors to make a profit and help people at the same time.  Go out and help some people today.