All Forum Posts by: Jesse Morrell

@Ron S. Each state is different. I’ve heard from two separate sources that in Texas, investors have purchased the second lien by mistake thinking they were buying the property only to have the property then go to sheriff sale, where all liens fall off in Texas.

@Bonnie Rhodes I started investing in lemonade stands when I was 9.

Then I flipped marijuana in Middle School and ran illegal gambling in the high school bathrooms. Then I got right with God and went legit.

Dropped out at age 16 to work full time and started saving.

Started my own business at 20 and saved up a capital of 10k. Used it to flip cars, trucks, and RVs until I had enough to buy a house all cash at age 26.

Continuing to live by simple principles like buy low and sell high, I am 35 now with 400k and I keep my capital growing through flips.

I’d like to hit a million by 40.

@Megan Deppe you could also offer to help them move, like $1,000 for their next apartment and a moving truck, if they leave willingly without damaging anything and without an eviction. It helps them get a their next place without an eviction on their record.

@Jacob Beg maybe I was mistaken in my first posts. Maybe the second mortgage is bringing the property to foreclosure and the proceeds from the winning bid are supposed to pay off the first and then the second lien, since the property is collateral for both?

I’d like to know the answer to this question myself.

@Jacob Beg maybe I was mistaken in my first posts. Maybe the second mortgage is bringing the property to foreclosure and the winning bid is supposed to pay off both the first and the second lien, as the property is collateral for both loans?

I’d like to know the answer here too.

@Jacob Beg you said the owner of the 2 lien is responsible for the 1 lien. I think that is backwards. The owner of the 1 lien is responsible for any 2 liens. Sometimes you might buy the 1 lien knowing there is a 2nd lien, in which you budget to pay it off. But buying the 2 lien does not make you responsible for the 1 lien or the owner of the property.

2 liens could be second mortgages but they could also be contractor liens from contractors not getting paid for work they did.

@Jacob Beg I also buy at trustee foreclosure auctions. My understanding is that buying the 2 lien, without buying the 1 lien, is how you can seriously lose your money.

2 liens get auctioned off because that’s just the legal process. But it’s getting auctioned off because its not getting paid. The property owner isn’t going to suddenly start paying that lien.

You get your money for a 2 lien if he sells the house, which he may not do. If he forecloses because he also doesn’t pay the mortgage, my understanding is that your 2 lien remains on the property and you’d be paid when the house eventually sells retail, as the person who buys the 1 lien at auction inherits the 2 lien also.

The risk, at least here in Texas, is that if he doesn’t pay property taxes and the property goes to Sheriff Tax Sale, all liens and mortgages on the property fall off and you lose all your money.

That’s the nightmare situation some investors have fallen into, when they bought the 2 lien by mistake thinking they were buying the property, and then it goes to Sherif Sale for taxes.

But to be clear, buying the 2 lien is not buying the property. It’s buying the 2 lien only.

That’s my understanding from what I’ve read about it. Curious, how did you know it was the second lien being sold? I’ve heard of them being auctioned off but I haven’t seen the paper work of them yet. Sometimes I see Notice of Trustee Sale papers saying “the mortgage or lien is being auctioned.”

What’s the longest you’ve taken to rehab a house?

@Jonathan Hasan yeah it’s good too to know if they are doing it right.

I definitely hire out roof and foundation. Some plumbing and electrical too. But I’ve done demo, framing, drywall windows, floors, driveway repair, etc. Definitely paint and light fixtures.

@Jonathan Hasan it varies from person to person. But ultimately you don’t want to do everything yourself. You want to get to the point where you can hire out the work. The division of labor to specialists makes it faster. But it’s good to be handy to save on some costs.