All Forum Posts by: Tim Czarkowski

Yes it appears it has, I actually read that previously. Does anyone have any specific things to be aware of? Any unusual risks with this strategy? Anyone have any experience doing this? Anyone have anything helpful?

I had someone bring up an interesting business plan after my recent trouble with purchasing a HOA lien that was thought to be a first mortgage. The idea would be to purchase HOA Liens and then rent the property out till the first mortgage is foreclosed. As long as the first mortgage foreclosure process was not started there should be about a 2-3 year window to cover the cost of the lien and make a profit. The tenant would be protected by having a long term lease in case the bank foreclosed earlier than expected. I thought it was a creative way of making money with the foreclosure mess. What are the problems with it?

That an interesting idea that way I could get a portion of my principal back and the rest back over time. Also that way I would not be managing the property and I should be able to get a higher price since financing would be provided. But as with holding it long term I would need to be able to reinstate the loan. I like that idea.

Florida has no right of redemption which is good in general but I guess it may have been helpful in this situation. That is a really novel approach. I knew I wasn't the only one! I figured it would be a good learning experience, not the best way to go about it but I might as well get what I can out of it. Thanks.

Yes I asked about that property specifically and have also spoken with a couple other title companies about it in general. I wish I could, it would be very nice. I suppose I could try a couple other companies but from what I have been told it seems like this is a general policy in the state of Florida.

As stated before I have already read everything on that link but a reread wouldn't hurt. Thanks for the reply.

Title insurance can not be provided on properties bought at auction, here at least. They will provide insurance when I resell but not on my purchase. Yes I am using them for lien searches. I have some understanding of this but have been trying to learn more. I have not been able to find a class or anybody willing to teach me more about it so far.

It's obvious the reason I would want the bank to short but I agree that it would not be in the banks best interest to do that. That's why I see that as a long shot. You never know though, banks do incredible stupid things day in and day out.

As stated before I will consider holding the property depending on the terms. If it entails my paying the mortgage off and have somewhere around 50,000 tied up in it, I would rather take the loss and move on. If I am able to reinstate it then it might make sense. The "loss mitigation" is the whole reason I have posted here and also the reason I am meeting with my attorney.

Foreclosure is also handled by the courts here but, as stated earlier, all bidding is held online here, so no opportunity to ask the attorney. If I was the junior lien holder I certainly wouldn't announce that to anyone.

Basically yes I made a mistake but everyone does at some point. I am just glad that although it was an expensive lesson it wasn't worse. As stated in the original post I have just recently started and I know I don't have thorough enough understanding of the title search process but I am working on rectifying that. I have read everything on this forum and many others along with countless other real estate books. Also my choice of title agent was extremely poor but that has been taken care of. Thankfully my first couple deals went great and I have made more money year to date working for myself than I made all of last year working for someone else. I've got two I am bidding on tomorrow so wish me luck.

The auctions are handled online here. Very similar to eBay believe it or not. It appears that the mortgage company was gearing up to foreclose on the HOA if they did not sell the property and pay off the mortgage.

Yes I made a bad decision on my choice of title agent but have now switched to a company that handles a lot of the the title work for the auction buyers in the area.

Yes that is basically what happened since the first mortgage is superior to the HOA lien, I am now liable for the first. I have requested a payoff/reinstatement statement from the attorney handling the foreclosure for the mortgage company. I also plan to speak with my attorney about it. The taxes are current and the HOA lien was for all money owed up until the auction date so I am good on that front. It seems if I can reinstate the mortgage and it has reasonable terms, I might just end up with a rental with sub-par performance instead of a total loss. Then a a couple years down the road get my money out. No short sales in the complex. There were a couple OREO's sold at 27,000. Regular sales were at 37,000 - 42,000.

It seems to me the bank wouldn't mind a reinstatement but there would be no reason for them to accept a short sale in this instance since they can likely get there money out. If I could get them to short sell so that I got my money out that would definitely be my preferred exit.

The property was already in very good condition and the price seems to be right at retail. I had considered renting it but it's a condo with $200 a month fees. The market rent would be about $700 and since it is on the other side of town if I kept it I would want to at least have someone else do showings for me if not full blown management. I usually try to do better than that on my rentals but I suppose it might be better than a total loss. Would reinstating the loan be possible? That would be the only way I would consider holding it. There is no way I want to have $50,000 tied up in this property. Thanks for the response.

I have been buying at foreclosure auctions recently and doing pretty well. Unfortunately last week I purchased what I believed to be a first but it ended up the mortgage company was re-foreclosing the HOA lien because of an error. Needless to say my title company was not doing what I thought they were and confirming which lien was actually being foreclosed. I was planning on switching companies after this deal because the guy seemed disorganized and did not really seem to understand what I was doing. One deal too late I guess. I purchased the lien for 12,700 and have a buyer lined up at 38,000. The first mortgage balance was 33,000 back in October. So basically if I'm looking at losing my entire investment at a minimum and maybe a little more after closing costs. My question is do I have any other options? I am meeting with my attorney on Friday to discuss it but I would love some other opinions on what to do.

I need to act quicker on my gut. I was using this guy because he works out of my office, so it's who the broker pushes us towards. He claimed to know what he was doing but he seemed unable to answer some of my questions and asked others he should have known. Oh well, it could have been a much more expensive lesson then it was I suppose.