Info on Buying the 2nd Mortgage?

[KCHomebuyers]

We've got a foreclosure situation where the owner is only 4 months back. she has a 1st mortgage with Chase (one of the worst lenders EVER) fro 128, and a second with HSBC for 32. the house is now worth about 170 and needs very minor cleanup and fixes. The worst thing needed is that the carpet should be restretched, and eventually replaced. This would be a great lease op property.

Now, the payments are low enough that we're seriously considering bringing the first current and taking it subject 2. Now to sweeten the deal, we really would like to just buy the second note at a discount. Most 2nds will take a ridiculous discount to get out from under the foreclosure, so we're thinking we'd come in offering say, 15 cents on the dollar for their loan - that'll create some pretty hefty equity.

We've got experience with short sales, so if we were to buy the note, would we submit something like a short sale pakage to the second for buying the note?

The other option is to fund the property completely with the 10-20% down coming from a hard money loan from my IRA (low interest, no payments, 5 year ballon :) ) and then getting an investor loan fo the balance.

Any help/suggestions would be appreciated. Thanks!

[KCHomebuyers]

^bump^

Anyone?

[Debbie]

Sorry about that.....I don't have enough knowledge on this.

I'll help you out on this----hey MB gang! Please lend a helping mouth to answer the above question. :icon_mega

Thanx. Debbie

[Jim Johnson]

We've got a foreclosure situation where the owner is only 4 months back. she has a 1st mortgage with Chase (one of the worst lenders EVER) fro 128, and a second with HSBC for 32. the house is now worth about 170 and needs very minor cleanup and fixes. The worst thing needed is that the carpet should be restretched, and eventually replaced. This would be a great lease op property.

Now, the payments are low enough that we're seriously considering bringing the first current and taking it subject 2. Now to sweeten the deal, we really would like to just buy the second note at a discount. Most 2nds will take a ridiculous discount to get out from under the foreclosure, so we're thinking we'd come in offering say, 15 cents on the dollar for their loan - that'll create some pretty hefty equity.

We've got experience with short sales, so if we were to buy the note, would we submit something like a short sale pakage to the second for buying the note?

The other option is to fund the property completely with the 10-20% down coming from a hard money loan from my IRA (low interest, no payments, 5 year ballon :) ) and then getting an investor loan fo the balance.

Any help/suggestions would be appreciated. Thanks!

...sort of take the property subject to. I would actually do this with a deed in Lu of foreclosure. If your going to buy the second, do so at a very steep discount. Then have the homeowner give you the deed in Lu of the second foreclosing. Notify the first you are a lender in the chain of title holding title in Lu, and now they can not call the first due. You can catch it up, you might even have the homeowner negotiate having the past due amounts put on the back end of the note before informing the first you have the deed. I know I did not give many details here so if you are fuzzy on part of this.. ask some questions and I will walk you through it.