Wholesaling Short Sale Properties in Rhode Island

The short answer

Can you wholesale a short sale in Rhode Island?

Yes, but the lender must agree to accept less than it is owed, and many lenders limit assignments. A 2026 bill would add wholesaler disclosures and cancel rights from January 1, 2027, so confirm the current rules before you sign.

A short sale needs three yeses: the owner, the buyer and the lender. You get the contract, send the lender a hardship package and an offer, and wait. Some lenders will not approve a deal that is assigned, so ask about their rules early. Our short sale wholesaling guide explains the process, and the arm’s-length guide explains why lenders watch these sales.

Time matters in Rhode Island because foreclosure is by power of sale, with published notice and certified mail to the owner. Bill S 3136 Sub A, matched by H 7840 Sub A, would give sellers and buyers a short cancel window, which strains a tight schedule. Confirm it passed and read the final text. Our foreclosure auction guide shows the end of the road.

The opportunity

Why short sales appear in Warwick

Warwick is a coastal city of Cape and ranch homes. Owners who bought near the peak, took on a home equity line or face heavy flood-related upkeep may owe more than a buyer will pay. Check flood-zone status on any shoreline home and price insurance into your offer. A short sale lets the owner avoid a foreclosure sale, and it gives you a deal most agents skip. Use the MAO calculator before you commit.

Lead sources

Where to find short sale leads in Warwick

• Notice of default lists. Owners who got a lender letter may be ready to talk. Read about default notices.
• Published foreclosure notices. Newspaper notices reveal sales before they happen. See lis pendens for related filings.
• Divorced owners. One spouse may need to sell while the loan exceeds the value.
• Hardship stories. Job loss or illness often leads to missed payments. Our negotiation guide covers the call.
• Attorney referrals. Rhode Island closing and bankruptcy attorneys meet owners in this position.

Your exit

Who buys short sale properties in Rhode Island

Rehabbers and landlords buy most short sales because they can handle slow approvals. They want proof that the lender has the file and an estimated timeline. Be honest about delays. Some buyers walk away after months, so keep a backup buyer ready. See our house flipping guide.

Make sure the final price and any assignment fee are visible to the lender where its rules require it. Hidden fees can sink approvals. Use an investor-friendly title company that has closed short sales, and ask whether the lender requires a written no-profit or arm’s-length statement.

Step by step

How to start wholesaling short sale properties in Rhode Island

1. Confirm hardship. Collect income, expense and hardship documents from the owner.
2. Get the loan facts. Request a payoff statement with written permission.
3. Set your price. Check comps and run the ARV calculator.
4. Sign the contract. Include a lender-approval contingency and a disclosure that you may assign.
5. Submit the package. Send the offer and hardship documents to the lender and follow up weekly.
6. Line up the buyer. Tell your buyer the approval timeline and keep a second buyer warm.
7. Close after approval. Close with an attorney once the lender approves the price in writing.

Every figure in this worked example is illustrative and not market data. A Warwick owner near Oakland Beach owed $342,000 on a home worth about $315,000 after a job loss. A foreclosure notice had arrived.

You contracted at $296,000 subject to lender approval, told her in writing that you might assign, and sent the hardship package. The lender approved after about 75 days and allowed the buyer’s name to be added.

A rehabber paid $306,000, and your fee was $10,000. The owner avoided a foreclosure sale. Check the numbers with the MAO calculator.

Rhode Island rules to know

Foreclosure timing, shortfalls and the 2027 bill

Foreclosure in Rhode Island is by power of sale under 34-27-4. The notice runs three weeks in a row, the first ad appears at least 21 days before the sale, and a consumer borrower gets certified mail well before that first ad. Servicemembers have additional rights. Mediation for owner-occupied homes may also exist, so ask an attorney. Our deficiency judgment guide explains why owners should ask about shortfalls.

Selling for less than the loan balance can leave an unpaid amount unless the lender waives it in writing, so the owner needs advice. The 2026 bill would also require written notices to both sides, add a short cancel window and treat more than one assignment in a year as brokerage. Verify what finally passed. See our license guide.

Learn it with a mentor

Work lender files with a mentor

Short sales reward patience and good files. Bring lender letters and hardship packages to our mentorship, and we will help you avoid costly mistakes.

FAQ

Short Sale Properties in Rhode Island: common questions

Keep going

More Rhode Island wholesaling guides

Read the full Rhode Island wholesaling guide or pick another situation below.

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