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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: Figuring out Jr. benes Posted by Gary on September 11, 2001 at 1:51 PM In Reply to: Re: Figuring out Jr. benes posted by Ward-CA- on September 11, 2001 at 7:18 AM Ward, Thanks for making that more clear to me. Let me ask you this, if I may, using the variables of a hot sellers market, 150K first, 50K second, what FMV would the property have to be for you to be interested in approaching the second to buy them out? And what would you expect to wind up negotiating it for? Thanks...just trying to make sense of it all... Gary : : I have a question I'm hoping one of you savvy investors who are active in buying 2nd and 3rd notes. : : For example, let's say there's a home, FMV at 200K. 150K first, and 50K second. : : If the first has begun foreclosure proceedings, what is the most a smart investor would pay to buy out the note from the second and make a reasonable profit? : : Thanks for your help. I love this gathering place... : : Gary : =•=•=•=•=•=•=•=•=•=•==•=• : Gary, there are a couple of caveats in this business of buying junior bene’s. One is keep an eye on your local real estate market. You want to have a Seller’s market to lower your risk. That means an average marketing time according to your local Multiple Listing Service (MLS) of about 1 — 60 days. In addition, you’d want the property located in the metropolitan area anywhere except in a barrio or ghetto—an area a yuppie wouldn’t be afraid of. : In such a bustling market you can count on amateurs bidding foreclosures up to 80% of their present fixed up market value (FMV). : So let’s turn to your example. If we assume that your $200K home is in a hot real estate market and located in an area agreeable to a yuppie then the foreclosing first of $150K will be predictably bid up to $160K. The $10K overbid would then go downward to the next equity holder. In this instance it’s the holder of the $50K second. The 2nd would have been wiped off the title of the property by the foreclosing 1st. The only money the holder of the $50K 2nd would receive would be the $10K overbid from the foreclosure of the 1st. : I think you’d agree that this example doesn’t appear to be too attractive as a junior bene buyout (JBB) prospect. We’d have to buy out the $50K 2nd for about $5K to pick up the $10K overbid and make a little money. Not a likely prospect. : : Hope this helps. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : Ward, : Thanks for making that more clear to me. : Let me ask you this, if I may, using the variables of a hot sellers market, 150K first, 50K second, what FMV would the property have to be for you to be interested in approaching the second to buy them out? And what would you expect to wind up negotiating it for? : Thanks...just trying to make sense of it all... : Gary : : : I have a question I'm hoping one of you savvy investors who are active in buying 2nd and 3rd notes. : : : For example, let's say there's a home, FMV at 200K. 150K first, and 50K second. : : : If the first has begun foreclosure proceedings, what is the most a smart investor would pay to buy out the note from the second and make a reasonable profit? : : : Thanks for your help. I love this gathering place... : : : Gary : : =•=•=•=•=•=•=•=•=•=•==•=• : : Gary, there are a couple of caveats in this business of buying junior bene’s. One is keep an eye on your local real estate market. You want to have a Seller’s market to lower your risk. That means an average marketing time according to your local Multiple Listing Service (MLS) of about 1 — 60 days. In addition, you’d want the property located in the metropolitan area anywhere except in a barrio or ghetto—an area a yuppie wouldn’t be afraid of. : : In such a bustling market you can count on amateurs bidding foreclosures up to 80% of their present fixed up market value (FMV). : : So let’s turn to your example. If we assume that your $200K home is in a hot real estate market and located in an area agreeable to a yuppie then the foreclosing first of $150K will be predictably bid up to $160K. The $10K overbid would then go downward to the next equity holder. In this instance it’s the holder of the $50K second. The 2nd would have been wiped off the title of the property by the foreclosing 1st. The only money the holder of the $50K 2nd would receive would be the $10K overbid from the foreclosure of the 1st. : : I think you’d agree that this example doesn’t appear to be too attractive as a junior bene buyout (JBB) prospect. We’d have to buy out the $50K 2nd for about $5K to pick up the $10K overbid and make a little money. Not a likely prospect. : : : : Hope this helps. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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