Turn a bad note into a good flip.

[Bret N.]

I have had a string of buying vacant 2nds in the past 6-months(although I thought they were occupied based upon the credit reports and the reputation of the seller. Eitherway, I'm a big boy and will shoulder the blow). 

To the point, how plausible is it to just follow the 1st and either contact them and/or wait for auction and buy it on court house steps and then flip the property?   I am a flipper too and wanting to expand out of state.  Or should I just cut my losses? 

[Bob Malecki]

Well I would contact the senior note holder if possible and see if you can buy their note at a discount, else wait for the FC auction. If there is some CLTV equity you may get a payment from the auction proceeds. You could also file foreclosure from second position subject to the first, then liquidate the property and pay off the first if there is enough equity for both loans.

Might be a good idea to contact a local RE agent in the area of the subject property to do a drive by before buying the note to determine if it is indeed occupied!

Bob