Need your help, Is it a 1st or 2nd? - Posted by steve

Posted by John on March 15, 2006 at 17:51:56:

Do your due.
Get a title report done, so you know what you are buying. I have experienced people who get behind in their payments and have the money and wait til the last moment to reinstate.

Your friend assumed and did not research the sale or property properly

Need your help, Is it a 1st or 2nd? - Posted by steve

Posted by steve on March 15, 2006 at 13:58:18:

Hi, I have a question about a pre-forclosure property I’m interested in. I was faxed a property profile of the subject property from a local title company that I work with. The profile shows that the owner, who was deeded the property as a gift from his parents in 2000, obtained a “renovation loan” for $300K in 2002. The same bank filed an NOD last month and is proceeding with foreclosure.

The comps are showing $900k-$1 mil for this property. I’m having a hard time believing that this guy is going to let this house go when he has about $600k-$700k of equity sitting in it. Which makes me wonder if the foreclosing bank is in second position. How do I find that out? If it is in second, where do I go from there?

I’m approaching this cautiously, because a friend of mine bought a house at an auction and thought that he had scored a great deal, only to find out that he was in second position. If any of you Seasoned Investors would give me some advice I’d really appreciate it. Thanks in advance.


Re: Need your help, Is it a 1st or 2nd? - Posted by ken in sc

Posted by ken in sc on March 15, 2006 at 18:27:08:

I agree with John, get your own title search to confirm. But it seems to me that the first thing to do would be to contact the owner and see if he has an interest in selling. Since he received the property as a gift, he may not know what it is worth, and he may be more willing to give up some of that “free” equity if you can buy quickly before the sale. If you sign a contract to buy it from him for say $500k, then you can get a title search to confirm that he can sell it for that.