Every investors NIGHTMARE? Both properties have LIENS!

Kaynan Na · 2024-03-14T08:52:57-07:00

I want to share my story and make it aware to others but also looking for opinions and thoughts. i purchased two properties in broward county florida from the foreclosure website auction. I purchased them with my company name & rehabbed them to find out that they both have a Morgage lien tied into it that i was not aware of. In my home state of ohio, these auctions come with clean title and they include all leins and morgages in the starting price so i figured it was the same for florida. first property i am a defendant on, the second im not because the foreclosure process started before my purchase date so im not entitled to the lien. Property 1 im 120k into it, the morgage company wants 136k . its worth around 190k currently, rent is 1800 if i wanted to rent it, HOA is 450 Property 2 im 280 in to it, the lender wants 360, but its worth 500 and can easily appreciate more quickly, rent is 4000, HOA is 1400 i have a family friend who is a lender whos willing to help offer cash to the lenders and then i can either sell properties for a lesser loss than 400k or hold for a few years and throw tennants in it and sell after to break even with the appreciation I'm hoping the lenders for the second propery is willing to work with me , and maybe even negotiate. i hired a lawyer today. fingers crossed. BEWARE everyone because im in a very bad scenario :(

Gina SternPro Member

Investor · Boca Raton, FL · Member since 2019 · 1k+ posts · 159 votes

2y

There are ways to deal with these situations, and it depends on the property and the lien holder, but it's possible to do some pretty incredible things if you are willing to invest a little more in legal costs to close the gap on your losses.

[email protected]561-430-2616

0 Reply

Kaynan Na

OP

Member since 2024 · 10 posts · 2 votes

2y

Quote from @Gina Stern:

There are ways to deal with these situations, and it depends on the property and the lien holder, but it's possible to do some pretty incredible things if you are willing to invest a little more in legal costs to close the gap on your losses.

Yeah hope it goes well. ever hear of this happening ? i see you work for property onion

0 Reply

Matt Devincenzo

Investor · Clairemont, CA · Member since 2011 · 3k+ posts · 2k+ votes

2y

Your description doesn't make sense. Did you purchase a foreclosure on a 2nd position lien that was subordinate to a senior loan which is still in place? If so then I'd be surprised if the same scenario couldn't occur in OH. It's a pretty widely discussed issue with buying foreclosure auctions. If your foreclosure was for the first, then any subordinate liens should have been stripped. Or are the other liens completely unrelated to mortgages and are some other attachment?

2 Reply

David B.

Member since 2023 · 4 posts · 0 votes

2y

Quote from @Matt Devincenzo:

Your description doesn't make sense. Did you purchase a foreclosure on a 2nd position lien that was subordinate to a senior loan which is still in place? If so then I'd be surprised if the same scenario couldn't occur in OH. It's a pretty widely discussed issue with buying foreclosure auctions. If your foreclosure was for the first, then any subordinate liens should have been stripped. Or are the other liens completely unrelated to mortgages and are some other attachment?

0 Reply

Kaynan Na

OP

Member since 2024 · 10 posts · 2 votes

2y

Quote from @Matt Devincenzo:

Your description doesn't make sense. Did you purchase a foreclosure on a 2nd position lien that was subordinate to a senior loan which is still in place? If so then I'd be surprised if the same scenario couldn't occur in OH. It's a pretty widely discussed issue with buying foreclosure auctions. If your foreclosure was for the first, then any subordinate liens should have been stripped. Or are the other liens completely unrelated to mortgages and are some other attachment?

The HOA association put a lien on the property and it went up for foreclosure auction. I purchased it thinking it was a clean title with no mortgage attached . Comes to find out it had a mortgage on it.

This is for both properties .

0 Reply

Chris SeveneyBusiness Member

Moderator

Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes

2y

@Kaynan Na

Very common in Florida for hoa to foreclose

First lenders since equity is in the property probably won’t do much negotiating. Doesn’t hurt to try

I assume you did not engage an attorney before bidding or run a title report before bidding on these assets as Florida is also a super lien state

7e investments53 Reviews

Website View Page

0 Reply

Chad U.

Investor · Boca Raton, FL · Member since 2012 · 1k+ posts · 1k+ votes

2y

In Ohio, yes oftentimes when a junior lien is foreclosing it does state in the precipae for sale that it is subject to the first. In Florida, no unfortunately.

The first rule in foreclosure auction buying, run a title report regardless of the state.

1 Reply

Gina SternPro Member

Investor · Boca Raton, FL · Member since 2019 · 1k+ posts · 159 votes

2y

Quote from @Kaynan Na:

Quote from @Gina Stern:

There are ways to deal with these situations, and it depends on the property and the lien holder, but it's possible to do some pretty incredible things if you are willing to invest a little more in legal costs to close the gap on your losses.

Yeah hope it goes well. ever hear of this happening ? i see you work for property onion

Yes, it does go well, and if you are patient, it's even possible to turn a profit. Unfortunately, we hear stories like this a few times a month and we have resources to assist those that are willing.

[email protected]561-430-2616

1 Reply

Gina SternPro Member

Investor · Boca Raton, FL · Member since 2019 · 1k+ posts · 159 votes

2y

Quote from @Kaynan Na:

Quote from @Gina Stern:

There are ways to deal with these situations, and it depends on the property and the lien holder, but it's possible to do some pretty incredible things if you are willing to invest a little more in legal costs to close the gap on your losses.

Yeah hope it goes well. ever hear of this happening ? i see you work for property onion

Yes I do Kaynan

[email protected]561-430-2616

0 Reply

Tim J.

Investor · Vermont and New York · Member since 2023 · 308 posts · 309 votes

2y

Quote from @Kaynan Na:

Quote from @Matt Devincenzo:

Your description doesn't make sense. Did you purchase a foreclosure on a 2nd position lien that was subordinate to a senior loan which is still in place? If so then I'd be surprised if the same scenario couldn't occur in OH. It's a pretty widely discussed issue with buying foreclosure auctions. If your foreclosure was for the first, then any subordinate liens should have been stripped. Or are the other liens completely unrelated to mortgages and are some other attachment?

The HOA association put a lien on the property and it went up for foreclosure auction. I purchased it thinking it was a clean title with no mortgage attached . Comes to find out it had a mortgage on it.

This is for both properties .

Seems like this should have been easily discoverable with less than an hour of legwork with the county or town/city. Not to be a jerk here, but when buying due to an HOA forced sale it seems pretty basic that one would check for other liens.

Sorry to hear of your troubles. As others have said - start a conversation with the lien holder(s)...

0 Reply

Kaynan Na

OP

Member since 2024 · 10 posts · 2 votes

2y

Quote from @Tim J.:

Quote from @Kaynan Na:

Quote from @Matt Devincenzo:

Your description doesn't make sense. Did you purchase a foreclosure on a 2nd position lien that was subordinate to a senior loan which is still in place? If so then I'd be surprised if the same scenario couldn't occur in OH. It's a pretty widely discussed issue with buying foreclosure auctions. If your foreclosure was for the first, then any subordinate liens should have been stripped. Or are the other liens completely unrelated to mortgages and are some other attachment?

The HOA association put a lien on the property and it went up for foreclosure auction. I purchased it thinking it was a clean title with no mortgage attached . Comes to find out it had a mortgage on it.

This is for both properties .

Seems like this should have been easily discoverable with less than an hour of legwork with the county or town/city. Not to be a jerk here, but when buying due to an HOA forced sale it seems pretty basic that one would check for other liens.

Sorry to hear of your troubles. As others have said - start a conversation with the lien holder(s)...

Well it was on the foreclosure website so i didnt know it was foreclosed on from the HOA association until after. lots of lessons learned here

0 Reply

Wendy PattonBusiness Member

Real Estate Consultant · Clarkston, MI · Member since 2009 · 853 posts · 349 votes

2y

Odd to me - if it is a foreclosure auction you bought them from them what did they foreclose on to begin with? If it weren't the mortgages, was it something else? a second mortgage only? the HOA ? contractor lien? but you should always do a quick title preview to know what is on a home you might purchase at any tax sale or foreclosure sale. Make sure what you are getting is what you know about.

Michigan Real Estate Investors533 Reviews

Website View Page

0 Reply

Gina SternPro Member

Investor · Boca Raton, FL · Member since 2019 · 1k+ posts · 159 votes

2y

Just a public reminder.

Before buying a tax deed or foreclosure from the county auction, do your due diligence.

You need to know what liens and judgments encumber the property and which lien holders are actually foreclosing.

You must understand how the liens and judgments interact with each other, which fall off after the foreclosure. Then it's super important to know how to deal with the property AFTER your winning bid: how to clear the title and how to negotiate left-over encumbrances.

If you don't know how to do these things, you are literally throwing money out the window into a hurricane.

There are shortcuts to learning these things, but you will need to get educated, and you will need to invest in yourself, time and money.

I can't tell you how many investors come to get a title search AFTER they win the property instead of a few days before they bid. One costs $50, and the other costs $20,000+. It's all about timing.

The ones who are educated and use the tools available to shop at the county auctions can easily get deals at 30%+ below market value. I see it every day.

@Kaynan Na - I don't mean to harp on your experience, but you need help, you need to get help quickly if you have any chance of recouping your investment. Don't procrastinate, and do not take help from anyone other than an equity recovery specialist, they are hard to find.