All Forum Posts by: Mike Rash

FinancExaminer,

The balance on the first note is 400k and the CURRENT property value is 400k. Therefore, the 2nd and 3rd notes have 'zero value'. If I buy the 1st note at the discount and then foreclose on it, the 2nd and 3rd note holders would get nothing. However, the foreclosure process in NY would take 2-3 years to complete. Therefore, the only worthwhile option is to buy out 2nd and 3rd lien holders and do a DEED IN LIEU.

I just don't know where to start in negotiating with 2nd and 3rd... Please advise?

Steve is right on the point!

In this scenario, in order to do a DEED IN LIEU, I would have to 'buy out' the liens from 2nd and 3rd lenders. My question was centered around on how to deal with 2nd and 3rd lenders - where do I start?
Furthermore, if one of the lenders refuse to sell / release his lien at a reasonable discount, then the whole deal falls through.
Did anyone actually done this themselves or do I need to hire an attorney or a 'loan specialist' to negotiate with the banks?

If someone could outline the steps involved, I would really appreciate it...

This is a follow up to my previous post.
I wanted to buy a NPN note (1st Mortgage) from the bank and then foreclose (hence acquiring the property).
However, there is 2nd and 3rd Mortgage. I did some future research and discovered that the foreclosure process in NY would take 24 month to 36 month (This is a DEAL BREAKER).

Some posters suggested doing a DEED IN LIEU… If I am able to locate the borrower, how would I go about negotiating with 2nd and 3rd lenders?
The balance on the 2nd is $150k and 3rd is $80k… Can you guys recommend how to proceed?

Thanks Steve, FinanceExpert, Mike and Jon,

I posted a follow-up question to this topic...

http://www.biggerpockets.com/forums/222-tax-liens-notes-paper-cash-flows-dealmaking/topics/60175-foreclosing-on-the-note

Thanks Jon and Financial Examiner.

I did some more due diligence and now considering making an offer, but would like your input on the 'price' that I should offer.

Here are the FACTS:

The property is owner defaulted immediately in 2007 right after the purchase and have not made any payments.

The UNPAID BALANCE (on the 1st note) is 400k and the property is WORTH 400K now.

Realistically, how much should I bid for it (keeping in mind the the owner has not made any payments in the last 2 years and that I would have to go through entire foreclosure process to obtain the deed) ?

Thank you.

New York State

I am interested in a property that is going through pre-foreclosure for the past year... Here are the FACTS:

1. Property was purchased in 2006 for 450k.
2. The owner took 3 mortgages: 1st - 350k, 2nd 100k, and 3rd - 150k.

I believe they used a 'straw' buyer and defaulted on all of the LOANS almost immediately...

The property is in a NICE location and I believe is worth about 400k now.

I have 'tracked down' the company (asset manager) that is holding the first mortgage and they want to sell the NOTE. Any advise on how to proceed? What would be the good offer price based on the numbers above?

Hi,

I did my CALCs listed below. Can you guys comment and give your opinions. I know this is not a SUPER deal... But I have to start somewhere and hopefully the next deal will be 'sweeter' :)

Monthly Annual Yield
Gross Rent $700.00 $8,400.00
Insurance ($50.00) ($600.00)
Taxes ($16.67) ($200.00)
Repairs ($70.00) ($840.00)
Management ($56.00) ($672.00)
Vacancy ($70.00) ($840.00)
Net Income $437.33 $5,248.00 8.26%
Deprectnon 58k ($175.76)($2,109.09) 3.32%
Taxable Income $261.58 $3,138.91 4.94%

Here are the reasons why I think it is up and coming area:
1. 10 minutes driving distance from Central City Philadelphia. (Main Corporate Hub)
2. There are numerous rehabs that were done in the past 2 years... I am not sure if all of them were successful as qualified buyers are hard to find (in today's market)... I see a lot of properties for sale, but at much higher prices...

p.s. I am not if 50% rule really applies to this property as the taxes are very low compared to other areas, hence increasing potential net income...

Hi Ron,

Can you elaborate on:
"Myself I like to lower my maintenace cost by selling on contracts for deed. "
are you referring to LEASE to OWN option?