Being a note holder on an upside down property where the owner is not paying is not a nice place to be.

You can buy it, but you will need to pay for the contract outside of closing, the lender will not finance the contact, unless the contract holder gets paid as a third party payout.

I wanted to get a 80% mortgage with a bank and keep the remainder of the principal as a loan with the private mortgage holder.

If nothing else that is a buy and holder.

I guess if the tax lien holder was able to successfully petition the court to initiate the foreclosure then it IS valid?

The note holder should have all of the settlement documents.Make sure the liens were filed in proper order and recorded.

Now these same investors want the sellers to also hold back a 10 percent second to be at a 80 ltv with the lender.The problem is used to if the seller held say a 10 second at 100k they could immediately sell off for 50k after closing.Now no note holder companies have bought a second position in over a year.

Another way is to add the buyer as a lien holder behind the bank.

If he sells the note it will be at a discount, but the discount may not be as much as the tax due on a cash sale and he will be taxed on the balance of pricipal received after the discount, on a per centage basis paid off, if any.I have done deals where the person who owns a note (note holder) used it for a down payment on other properties.

Would I get a free home out of the deal or would I be responsible for paying the lien holder of the mobile home?