All Forum Posts by: Mike Hartzog

One thing to look at is population growth.  You can find future projections online, but recent history is a strong indicator as well.  Here are the top 50 cities for population growth from 2010-2013 from the US census.  The right hand column is percentage growth over that timeframe.

Matt - We seem to have a disconnect here. Your original post said you had the opportunity to purchase an HOA deed at 25c on the dollar. A deed conveys ownership so my assumption was that the HOA foreclosure had already happened and your opportunity was to take ownership of the property. I am thinking now that you meant HOA lien. Is that correct?

Matt - If the 1st lien holder gets their lien re-attached to the deed in a legal action, they would have no motivation to short sell because their lien would be at 97K against a property value of 132K. They would simply foreclose since they would have 35K equity in the property.

Right. I simple title search should verify that the mortgage liens are gone. I think the real issue is one of notification, where if the first lien holder did not receive proper notification of foreclosure they could potentially win recourse of some kind in a lawsuit. The question I have is what is that recourse. My assumption is that the mortgage lien could be reinstated against the deed. Using Matt's numbers above, that would leave him with a loss on the investment. (38K investment + 97K lien = 135K, against FMV of 132K, and we haven't counted delinquent property taxes and selling costs yet.)

Rick - That is my understanding too, but I am not sure if the HOA gets to step in line ahead of delinquent property taxes. I assume not.

Never rely on a "Zestimate".  Better to contact a local agent for a valuation and take it from there.  Foreclosures are not always good deals as there are a lot of underwater properties out there.

I have been following this thread with interest.  Rick's comment makes sense to me.  So I guess the strategy here would be to rent the condo out while you are waiting for the bank to make a move.  I am unclear though what would happen if the bank took the deed holder (investor) to court and won.  I assume they get the right to re-attach their lien to the property.  Is that right?  If so, then one major thing to look at when evaluating the investment is the unpaid balance of the lien compared to the value of the condo.

@Bill McCafferty - I am focused on non-performing 1st liens.  I would be interested to hear more about how you like to work the 2nds.  Specifically, once you foreclose you have the property subject to the first.  Are you generally selling or keeping them for rentals while maintaining the first lien?

Deed in Lieu will satisfy the debt if the bank agrees accept the deed as full consideration for the loan, and that is general practice, but it only applies to that specific loan.  It would not satisfy junior liens.  So for example, if I am holding a first note and you are holding a second note on the same property, and the borrower conveys title to me via DIL, the first lien is satisfied but now I hold deed subject to your note which is now in first position.   

@Stephen S. -  If the owners bankruptcy was chapter 7 they no longer have a personal obligation to repay the loan, and the bank has no recourse against the owner.  The owner could check with their BK attorney to verify this.   The loan is still a valid lien against the property however, and the bank can still foreclose.  Because the owner currently has nothing to gain by helping with a short sale, you might offer some cash for helping you complete one successfully.  And I think @Divina Westerfield is correct.  You need to get a title search ($75 online) to find out about any junior liens.  If there are junior liens of any significance which are not currently held by the bank which holds the first lien, its probably a no-go.  You will also likely need the help of a good RE agent to get the short sale submitted to the bank.  Its a long shot at best IMO.