All Forum Posts by: Jonathan Kulak

Thanks Adam! I realize this one has a lot of moving parts, but that might be to my benefit since not too many people would want to take it on. To be fair, this is my first deal, but I am working with a very experienced, successful investor who is mentoring me so I'm not alone. It would be a pre-auction buy out and the 216K is the senior lien from Wells Fargo. I have the cash to make the deal happen but obviously the HELOC makes this complicated. Once I meet with the seller, I will let everyone know how much the HELOC is for. I'd love to hear from anyone who has experience buying out a junior lien holder.

Thanks Ed! No HOA fees on this one. The final judgement has already been issued and the junior lien holder hasn't filed any paperwork. It is my understanding that when/if the property going to public auction then the senior lien holder will be paid off first and then if it sells for higher the rest of the money will go to the junior lien holder. It seems as though the junior lien holder has the potential to lose a lot if it goes to auction and could be willing to reduce the money owed so they at least get something. While I realize this could be difficult, I'm looking for solutions. Any thoughts about how to approach the junior lien holder or options I could have?

I'd love to hear any ideas, suggestions, and direction from all the experienced pre-foreclosure investors out there regarding my first deal which is in work. I'm really excited about it and know I can close this deal. Thank you for your time and help in advance!

Story: I found this property by researching back owed property taxes. The owner has two homes, 1 condo and 1 primary home. He owes back taxes on his condo, but in my research I found that his primary home just had a final judgement issued on it at the beginning of Oct. The primary home is to be auctioned on 30 Jan 14 with a final judgement of $216K. He also has a junior lien for a HELOC but I don't know how much he used or didn't use. The house is custom built and amazing with all the upgrades out there. It's fair market would range anywhere from $350K-$425K. I left a note for the owner and he contacted me 3hrs later. From all my research and speaking with him, they are an older couple who is in a very tough situation and is very motivated to get out of it. I am meeting with him this Sunday (11/3) to see the house and learn more about his situation so I can try to find a solution to his problem that is a win for both of us.

My plan: I will build a relationship and learn more about their situation while be compassionate and not just trying to get his home. While learning more, I'll have him give me a tour of the house so I can take some pictures and gather some numbers. I also need to determine if he has any additional liens and how much the junior lien for the HELOC is worth. Once I've got all the info I can, I'll make an offer either that day or the next day. I'd then ask them to sign an authorization to release so I could start contacting their lenders to gather info. I have a cash buyer and also a hard money lender ready to act if I can solve their problems and get the house under contract.

Questions:

1) How does the deal sound and my plan?

2) How much power would the junior lien have over the sale and should I be concerned about their interest?

3) If the junior lien holder has to be satisfied could I work a reduction or possibly transfer the lien to their condo? What options are out there? (The condo will be becoming their primary home after they lose or sell the big house)

4) Should I make an offer at our first meeting or get back to them? What options can I present to them to solve their problem? I'd love to get the home for just the final judgement of $216+interest and help them by paying off their back due property taxes on the condo.

5) What am I not thinking of or could do better?

My name is Jonathan Kulak and I'm new to BP and to real estate investing. I am an active duty military officer, but I have a passion for helping others with their finances and real estate decisions. I've lived in MA, TX, MS, and now live in NW FL in the Panhandle area. I own my own home, but that is my only real estate experience other than helping friends find/buy properties. I am also blessed to know a very successful investor who is mentoring me and has a lot of resources at his fingertips. My goal in real estate is to help people who are finding it challenging to buy a home do it in an smart and economical manner so that they can grow their families and live out the American dream. To do this I need to acquire properties that I can then resell for a fair price so that everyone benefits. I would also like to help people who are in the pre-foreclosure stage save their credit by purchasing their home or finding a solution to their problem. I found BP as I was searching for investing resources on the web. I'm looking forward to learning for everyone here and I'd love to met anyone in my area who has similar goals.