How do I foreclose on property if we can't find the owner

[Remi Oguntoye]

Hello Bigger Pockets!

Interesting situation: We called a gentleman (mortgage holder) on a property he previously owned. Mortgage holder sold the property to another person (Owner) on terms, and that individual stopped paying rent about 4 years ago. Previously, the mortgage holder was able to collect rents from the tenants, and the fact that the Owner stopped paying didn’t matter. However, 9 months ago, the tenants stopped paying rent, and they will be vacating the property shortly. I’m considering purchasing the mortgage from mortgage holder (at a discount). With the renovation and the discounted mortgage balance, I would be over a 2% rule even though I don't technically own the property. I would initiate the foreclosure process, and I understand that will take time and money, but I believe I would be cash flowing the whole time.

I want to confirm what I have been told: that I can renovate the property and collect rents as the mortgage holder while pursuing foreclosure. To make it more interesting, we’re not exactly sure where the Owner is, as he’s gone ghost this year. The discount on the note makes this a nice purchase, if there is no way for the Owner to come back and pay the note and retain ownership of the property.

For reference: Property is located in Upstate New York.

Does anyone have experience in a similar situation or any advice to share? 

All the best,

Remi

[Tom Gimer]

When you foreclose a lien it’s not to obtain title... it’s to sell the property in order to pay off the lien. Going in and making improvements thinking you are going to eventually take back the property through foreclosure is not wise. 

Regarding foreclosing when the owner can’t be found... you file a motion for alternate service (posting, publication) in the case. As an owner, hiding doesn’t work.