Junior Salters If the seller is out then I guess none of this really matters but I think with rents so low compared to the value the only money to be made is if someone could do a light rehab and flip it to an owner occupant.

Assume that most hard money deals will have the hard money lender expecting to be in 1st position.Mezzanine financing can take place with an outside investor comes in with equity or a junior loan.

When the HELOC forecloses in first position, it will wipe out the 2009 Citimortgage, which is in junior position to the HELOC.

The foreclosure/auction will wipe out all junior liens (i.e. the 15k).I bet that the property is way underwater and is not worth 380k.Property #2: A little background here.

go to a junior college to keep your costs low. why not offer to work for a real estate investor for free (sweeping, menial work) in exchange for him/her teaching the works.my biggest mistake was approving a couple for a renter who was not even close to 3 times the rent. they had always paid the rent on time in the past and always paid me on time - even had $16k in the bank!

If you tried to foreclose on them, your forclosure would have to be subject to existing liens, and you would be a junior lienholder to the bank that holds your original mortgage.

The first would have to agree to pay off negotiated amounts to any junior liens, out of the sale proceeds. 

This is when he would agree to be junior debt- behind the other debt coming in( private money- hopefully lower rates)Now you can get close to 50% LTV loan- pay off debt, have enough for repairs- and give seller a little cash.Other key would be for seller to hold paper with low, low rates or better yet- just a bullet within 12 months-- so your holding costs would not be real high.

Junior liens are much more difficult to obtain the waiver than primary liens.As previously stated, you need to negotiate at least one short sale to understand the issues involved in the negotiations, such as the lender losing the paperwork, the account having one negotiator for a while, then right when negotiations are set to complete, the account is assigned to another negotiator, etc.

I prefer buying existing, performing junior notes.