BiggerPockets

I currently have a HML with another individual. I may end up having to take over the property soon. If I have to do this what is my first step? Do I need to get an attorney? For those of you who have been in this situation, would I be able to recoup any money that is owed to me (like interest)? Is this treated like a foreclosure? Trying to get a little info before I give an ultimatum to this individual.

It wouldn't be like a foreclosure. It would be a foreclosure. However, that's only if your borrower fights it. The first thing to do would be to do a deed-in-lieu of foreclosure. If you and your borrower agree to that, they would give you a deed to the property and you would release the lien.

If they won't agree to that, or perhaps if you feel like you can get more out of them or the property at auction, you would have to do a foreclosure. You're going to need an attorney. Every state has a process, and you'll have to work through that process.

Being able to get any money from them would depend on their circumstances. If you think there is money to be had, you might ask for a deed and some cash as your starting point. If they don't have cash, you might be just as well off to take the property and be done with the whole deal.