There is a Short sale property in Florida with the following:
145K listed price
130K in first lien
20K in second lien
The second lien was sold to some private company and they tried to file the foreclosure
Is there any options to make money on this deal?
How much to offer for this short sale?
What kind of repairs does the property need and what do you think it's ARV is?
If the ARV is only $155k I would not bother with it, not enough meat on the bone. Dealing with multiple lien foreclosures can be complicated and expensive. Where we are at, the second mortgage lien holder can "forclose" and the new buyer of the second lien has 180 days to make right with the first lien holder. If they pay off the first lien within 180 days then they own the property. The first lien holder can still sell the property to you but then you can get into a legal mess with the second lien holder and have to have a legal battle or pay them off. If the second lien buyer has had it for more than 180 days and has not made it right on the first lien then you can take a risk since they are not part of the chain of title.
Will the first lien holder be flexible in taking much lower price due to the second lien holder trying to foreclose?
My experience has been no. The first lien holder gets paid first so they usually try to muscle out the second lien position. Usually whomever gets the second lien has to make arrangements to pay the first and anything left over is theirs.
This is also why you never want to buy a secondary lien at a forclosure auction, there are a lot of reasons to not get fully paid and very few that work out in your favor.
The 1st mtg has equity, assuming a 145k slaes price or so, it Won't be a short for them, they'll be looking for a full pay off. It's the 2nd who will take the whole hit, if they are willing. I'm assuming the 2nd didn't "try" to file foreclosure, they did file.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing