** Foreclosure Overage Recovery **

[Chad Shultz]

Investment Info:

Single-family residence other investment.

** Foreclosure Overage Recovery ** - This one was a bit different. I had met these people when they were going through Probate and wanted to sell the property. The big problem for them was they had a reverse mortgage on the property, which had a balance above what the property was worth to an investor. We tried to help them sell, but it would not be. About a year or more later, they went through a foreclosure by their HOA. An uneducated person bought the property at the HOA foreclosure for about $180k+. After paying off the HOA lien, there was $171k left which was available for the probate family. The first mortgage had never foreclosed and the first mortgage holder did not go after the overage from the HOA foreclosure. I helped these folks recover the $170k+ from the court. The buyer of the HOA lien had to fight against the first position mortgage holder who started a foreclosure after they bought the HOA lien. I was able to make about $19k as a fee for the recovery. The person who bought the HOA lien did a $100K+- renovation and had to bring money to the closing table because of the first position mortgage. My clients were very happy and the buyer... no so much. This should tell folks to do their research before buying foreclosures at auction. You need to know what you are bidding on.

How did you find this deal and how did you negotiate it?

I had developed a relationship with the property owners during an initial attempt at helping them with probate.

How did you finance this deal?

No money out of pocket and no money up front.