Many beginner real estate investors would be shocked to learn that short sales are not guaranteed to be profitable – it is possible to lose money if you don’t know what you’re doing. Obviously, no investment is a guaranteed. But many assume that purchasing a property at a nice discount below the amount of the current loan balances on the property is a guaranteed way to get rich. It isn’t.

Why isn’t short sale investing always profitable, whether it’s in Florida short sales, California short sales, or Colorado short sales? Because the reason the property is a short sale in the first place is that its value was over-inflated by the lenders in order to lend more money against it. Just because you’re buying it for less than it used to be worth (maybe even significantly less), that doesn’t mean the price can’t go down even more in the future.

All this is not to scare you away from purchasing short sales as investment property. It is only to underscore the need to get an experienced short sale negotiator on your side when making an offer on a short sale property. It’s helpful to find someone who is local to your region. If you’re looking for a Denver short sale, find a Denver agent who is a short sale expert. Without such expertise on your side, you’re likely to experience unnecessary delays, steep counteroffers (that’s why it’s called negotiation), and frustration from bankers who are not in the business of selling homes.

There are methods and strategies that only experienced agents who have successfully negotiated numerous short sales transactions can know. A short sale specialist will keep you from offering too high.` A successful investor knows that the largest amount of profit comes at the purchase, not the sale of the property. Don’t put off your profits until you sell the property.

Base your offer on your investment strategy; don’t shoehorn your investment strategy into the fundamentals of the deal. If the deal does not meet your investment criteria, or the bank doesn’t want to negotiate with you, walk away. There are many others short sale properties to choose from. The right bank with the right owner in the right situation will make the deal you need to earn a respectable profit off of your investment, whether your strategy is flipping short sales or holding short sales long-term as rental property.