All Forum Posts by: Marc M.

Thanks for the replies guys! I'll let you know how it turns out...

Thanks for the replies!

 @Cody L., what is the best strategy to approach a bank to purchase their loan for a discount? Is that considered an assignment sale?

@Wayne Brooks, I'll have to comb through the 3rd and 4th's loan agreements to be sure, but assuming either can pay off a foreclosing senior, and these mortgagee's are individuals and not banks, it seems more likely that I could purchase their notes with the goal of paying off senior debts (in lieu of approaching the 1st and 2nd banks directly). What would you do in this situation?

@David Dachtera, taking the property subject-to would work fine numbers-wise...there is a lot of equity in the property, and even more room for value-add, but what are the chances of negotiating with the banks if they exercised the due-on-sale-clause? Who has more leverage in that case, the owner or the bank?

And one more question I'm hoping someone can answer: In California, if a mortgagee forecloses a high-equity property and it goes to public auction selling for way above the debt owed, does the overage go to the previous owner or the foreclosing bank?

Thanks,

Marc

@Wayne Brooks

Here is a scenario I'm looking at in Los Angeles County, and hoping to find a win-win scenario to step in as an investor to help out this guy out: 

High equity owner ($800k+), senior citizen, living off of social security with 4 mortgages as follows:

1st) $12K

2nd) $250K

3rd) $30K

4th) $20K

The 1st and the 2nd are on the brink of foreclosure (60+ days), and the 3rd and the 4th are personal 'loans' secured by a deed of trust in the county records. If the 1st initiates a foreclosure, how can the 2nd, 3rd, or even 4th in line protect themselves? It would seem obvious that the 2nd would eagerly pay off the foreclosing first, but I'm unclear on the mechanism to do this (aside from just sending the mortgage company a check), and wondering how they eventually get reimbursed? Or is that just the cost of saving your $250K from going down the drain?

Alternatively, let's say the first begins foreclosure proceedings, can the 3rd or 4th step up and pay off both the first and the second mortgages to take a senior position? 

What would the best strategy be to make a small loan to the homeowner? I'd be fine to take a 5th position because there is a lot of equity in the property, but I'm unsure about the rights of junior loans to foreclosing seniors. 

Thanks,

Marc

Does anyone have experience using the Historic Preservation Federal Tax Credit to rehab a historic building? I am looking into different funding models to rehab a 1927 two-story brick building in Detroit, and wondering how much of an impact this tax credit had on your bottom line, and if you used other tax credits as part of the 'stack' such as New Market Tax Credits? 

If you are an investor who regularly uses tax credits (historic, or otherwise) are you selling your credits through credit brokers to generate cash? I would love to hear some case study examples....

Best,

marc

@Scott Matthew C., thanks for the reply.. it's a federal tax lien for "small business / self-employment area #2" against the named tax payer for "1040 kind" of tax. I'm hoping there are other investors who have bought mortgage foreclosures with recorded IRS liens that can chime in to describe the post-auction actions they took to discharge / release the lien and whether or not these steps were necessary to deliver a clear title....or if waiting out the 4-month redemption window was adequate for a title company to insure title? The IRS lien is junior to the mortgage that its in foreclosure, and the lien specifically states that it against the tax payer who happens to live at the foreclosed property address. 

Thanks for the reply @Jeff Rabinowitz, I read through the link but it seems specific to tax foreclosures, which I have found to be fairly reliable in wiping away title encumbrances. I've had to quiet title on half of the properties I've purchased through tax auction, which usually had more to do with ambiguities in mailing notices to previous owners than surviving liens. As government bureaucracies, I'd imagine that counties and states are giving proper notice to interested parties, including the IRS. I'm just wondering how reliable a foreclosing bank (and based on the assignments in the title chain....one that buys NPN specifically to foreclose) is at notifying the IRS as an interested party. Looking at the recorded IRS lien on the property I'm interested in, it appears to specifically name the owner of the property...not the property itself. So it would be a matter of notifying the IRS that their 2nd position is compromised unless they redeem. But I don't want to kick a hornet's nest if I don't have to... Does @Jay Hinrichs or @Wayne Brooks want to weigh in?

Hell BP,

Has anyone had any experience purchasing a property on the courthouse steps in Michigan that has an IRS lien on it? I've been reading a lot threads on here that sounds like the IRS lien is wiped 4-months after the auction, but I just want to confirm that is the case for Michigan. Also, what procedures (if any) are necessary to release the lien after the sale? Is the public notice of the foreclosure considered adequate 'notice' to the IRS? If I buy this property, do I just wait it out 4 months for the lien to sunset while waiting 6-months for the redemption period to pass too?

I'm looking at property going up for auction for $183K that is worth $230K and has a $60K IRS lien. 

Best,
marc

Hi Folks,

This is a Michigan-specific question for weekly Sheriff's sales: 

What strategies do investors use to protect their purchases during the redemption period? Let's say the bank sets the bid amount on an occupied property for $50K and several investors bid it up to $90K because it's worth $120K....now the investor has $90K tied up for 6-months until the redemption window closes. Since the homeowner can redeem (at $50K, right?) what is stopping another investor from knocking on the door and offering $10K to homeowner for a quitclaim deed? Or said differently, $10K for the redemption rights? Or is that scenario an impossibility because the $40K overage will technically go into the homeowner's pocket? And what about the realtors who seem to be compiling lists of sheriff sale properties to (presumably) approach desperate homeowners to list with them during the redemption period?

I'm trying to figure out the pitfalls of buying properties through sheriff's auction and looking for ways to mitigate some of the risk. There are a couple properties I have my eye on that are going up for sale soon....I'm having a title company do title searches on each one to determine lien position...both properties are vacant, so the redemption period is only 30-days, but it's unclear to me if it is the foreclosing bank or myself as the sheriff's deed holder is the ("mortgagee") who determines if the property is "abandoned in accordance with MCLA 600.3241a"

Based an exterior inspection, the bank has already seized each property by installing padlocks on the doors and winterizing the plumbing. In these situations is it best to just sit tight for 4 weeks with my fingers crossed?

Best,

Marc

@Brandon Cook, as long as the water account is currently in your name you can call the water department and schedule someone to come out and turn it on (but you need to have a person present to let them in...and they're not very good about calling beforehand, so you'll have a large window of when they'll actually show up). If you don't have the account set up in your name, then I'm afraid you will have to go down to the office in person, and need to show the deed, your LLC's articles of organization and EIN. I'm not sure about what to do as a Canadian citizen, but plenty of property mgt. companies are handling this sort of thing for out-of-town owners or even out-of-country owners...

Hi Folks,

I'm wondering if there are any BP members out there who have successfully rehabbed / renovated a property in the city of Detroit from afar? How did you structure the payments / contract? I'm looking to convert an East Village SFH back to a duplex and rent it...but having trouble finding a contractor that comes recommended. Any leads would be appreciated...

Best,

Marc