In most states, the public auction clears out any junior liens, but there are exceptions such as tax liens, which typically will continue to be in effect after the auction"They are transferring title via SPECIAL WARRANTY DEED, rather than TRUSTEE DEED,so there's this:Special warranty deed Arizona and junior liensArizona Revised Statutes33-402, Forms for conveyances; quit claim; conveyance; warranty; mortgage .... 33-723, Right of junior lien holder upon foreclosure action by senior lien holder ... 33-730, Limitation on deficiency judgment on mortgage or deed of trust as .... 33-1226, Easement to facilitate exercise of special declarant rights ...www.azleg.state.az.us/arizonarevisedstatutes.asp?

And that my friends is the moral and the importance of me sharing this story.In the event that the 3 years passes and I decide not to exercise my option, I will have to cover the carpet cleaning costs and repaint the walls.

I give them the realities of the market on a national scale and then they decide if NNN whether single or multi tenant is right for them.I just think it is a wasted exercise to go into tons of what if's when someone does not have the deep level experience of the reality in the sector.Hope it helps.       

I am in the process of doing this exercise in real life.

I haven't had much luck with one but I will keep trying.When I started in real estate is was the old fashion way, buy with down a payment and use the equity to buy another and repeat.I now realize that there are more creative ways, and I'm like a sponge trying to find out where I fit in.I enjoy traveling, exercising, movies and comedy.

The opening balance sheet looks like:Assets:CFD for Prop 1: $100KCash: $12KLiabilities and Equity:Loan balance for CFD on Prop 1: $88KOwners Equity: $24KIncome Statement:Rent Revenue: $1100less PITI: -$661Less vacancy and repair reserves: -200net distributable cash flow: $239$80 distribution to each investor for per month on an $8K initial investment.As the MTG balance drops, the equity position of each investor increases, once paid off, the CFD is exercised and equitable title transfers to the LLC, and I no longer hold a financed property in my own name.

Senior can exercise its business judgment on the timing to foreclose if there is a default.

@Jose Castillo This is just a thought exercise at the moment for me, but let me walk through what I'm thinking.

They are a great if you do any commuting or while exercising.

If you have a responsible tenant that wants to save a little on rent, then they can do it and some are motivated to do so to save the money, I know I would be and enjoy the exercise.