Buying Junior Mortgages at Sheriff's Auction in Michigan

[Marc M.]

Hello BP,

I need some foreclosure 101: What strategies do investors use when buying a junior mortgage in foreclosure at county sheriff's sale to get a return on their investment? I'm looking at a particular property that has a junior note going up for auction for $25K, and there is a senior performing mortgage for $150K....is it possible to buy the $25K note and then pay off the senior mortgage, and hope the homeowner doesn't redeem within 6 months? Or do you buy the junior, and wait 6-months, and THEN pay off the senior? I'm not clear on how a sheriff's deed works when obtained through the purchase of a foreclosed junior. What are the pitfalls?

Best,
Marc