Posted by Natalie-VA on March 12, 2007 at 11:22:10:
I would hope that he knows his market before doing it.
–Natalie
Buying discounted 2nds. - Posted by John
Posted by John on March 09, 2007 at 17:42:34:
I have been told that you can buy 2nd mortgages on homes that are in pre foreclosure at a discount. So for example if someones house is in pre foreclosure the bank that owns the second mortgage knows that they will not get anything if the house goes into foreclosure so they will generally sell the 2nd for maybe 5-10 percent of the outstanding balance and then you can turn around and buy that home and potentially have a profit of the discount. I have also heard of buying notes at a discount. Is this the same thing? Any input would be appreciated. Thanks.
Ummmmm, buy some note larnin’ first - Posted by John Merchant
Posted by John Merchant on March 11, 2007 at 12:23:21:
I’d spend your first spare dollars getting some basic knowledge about notes, what should and should not be bought, what happens to 2ds in foreclosure of 1sts, etc
Some mighty good books and courses are to be found on this site…David Butler, John Behle, Michael Morrongiello are all very knowledgeable and experience about notes and anything by them is going to be valuable info to you.
I’ll give you some very basic note know-how right now…if you did buy a 2d on a property being, or about to be, foreclosed, you’d have to be ready and willing to pay the delinquency on the foreclosing note and then be able to keep up those payments until you were able to sell that property…or else you’d soon find yourself being foreclosed on.
Re: Ummmmm, buy some note larnin’ first - Posted by Bob Smith
Posted by Bob Smith on March 12, 2007 at 09:50:50:
If you’ve done your homework, you won’t have to bother paying the delinquency. Just buy the 2nd and profit from the overbid at auction. At worst, bid at auction and acquire the property, which should still be profitable. Assuming you have competitors overbidding the first, you’re bidding with ten-cent dollars and they’re bidding with real dollars, which is a nice position to be in.
Overbid not guaranteed. - Posted by blucat
Posted by blucat on March 12, 2007 at 10:02:30:
Interesting take on it.
If he buys the 2d, and then there’s not an overbid, then his 2d has just been wiped out by the foreclosure of the 1st.