Posted by Mark on December 17, 2002 at 21:42:04:
Thanks,
I will keep an eye out for a trustee to be appointed.
Ch11, MechLiens, 85 homes & 1 Mortgage, Help? - Posted by Mark
Posted by Mark on December 17, 2002 at 21:05:22:
Today while knocking on foreclosure doors I wanderd into a subdivision that had about 80 homes half built and vacant. The neighboors indicated that the developer had filled bankruptcy 4 years ago and the properties have been siting ever since.
After some reaserch here is what I found:
-No Lis Pendens or Forclosure
-Each property has about a dozen mechanic liens
-All properties have a 1st lien that is a “master Construction loan Agreement” that allows for a revolving line of credit and colaterial. In other words you can move individual parcels out from the line of credit when they have been retailed out.
-The developer filed chapter 11 in 3/9/2000 and no trustee has been appointed yet??
- Construction stopped about 4 years ago with the majority of the homes roofed, sided and rocked on the inside.
-Taxes have not been paid and the Tax Cert sold 11/02 owner has 2.5 years to redeem.
-Today these homes are selling between 160k to 200k
Can anyone see a way to work on this. Could I buy out one of the mechanics liens at a discount and forclose?
Any ideas on ways to crack this nut would be helpful.
Thanks,
Mark
Re: Ch11, MechLiens, 85 homes , Help? - Posted by Brian, WI
Posted by Brian, WI on December 18, 2002 at 16:24:36:
Mark,
Is the neighborhood you are talking about in Wisconsin?
I too stumbled across such a subdivision, but most of the houses are finished and were occupied. The developer “sold” them on a rent-to-own basis then went bellyup himself.
Right a lot of these houses (about 20) are Hud homes and selling in the price range you mentioned…$160k-$200k.
Just curious.
Brian,WI
Re: Ch11, MechLiens, 85 homes & 1 Mortgage - Posted by JT-IN
Posted by JT-IN on December 17, 2002 at 21:29:48:
Mark:
Can’t foreclose while the assets are in Ch 11 BK. The BK will stay any attempt to collect any lien, including the tax lien that was sold last month.
Your best bet would be to watch this case until a Trustee is appointed. Once that occurs you can attempt to negotiate with the Trustee to purchase assets. What my guess is, that the Trustee would not be interesting in piece-mealing out the houses unless there is not one or two buyers.
The real deal here may be in contacting the lender to determine if they have an interest in selling the mtg… Of course this would be a huge investment, but it is likely where the money/profit potential lies. The Lender is in the driver seat since they are a secured creditor. The Mechanics liens will undoubtedly go down the drain when this hits foreclosure, which won’t occur until the BK Trustee gives relief from the BK stay… and of course that won’t happen until there is a Trustee.
My guess is that the Lender with the Mtg in this mess isn’t pressing to get a Trustee appointed… which doesn’t make much sense. Maybe they have written off anything of substance here… who knows at this point.
Hope this helps some, but it is not likely a deal for the avg investor… sorry.
JT-IN
Re: Ch11, MechLiens, 85 homes , Help? - Posted by Mark_IL
Posted by Mark_IL on December 19, 2002 at 01:05:19:
No, Plainfield, Illinois. I tracked down the lender today and they just completed the foreclosure (I did not see it recorded?) and have a purchase agreement for all of the homes with another developer.
A little late on this one.
Mark