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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Jr. Bene buyout Q&A Posted by Ward-CA- on July 03, 2003 at 9:27 AM In Reply to: Ability to discount 2nd in this hot market posted by Jan Caldwell on July 02, 2003 at 10:21 PM : Ward, : I am tracking a foreclosure property where the 1st is a $250K lien, the 2nd a $30K and a property tax lien of $6K. The property when fixed up will sell from $470K to $500K. I have noticed from attending auctions that the properties sell for considerably more than opening bid (Today: opening bid $30K - winning bid $120K; opening bid $50K, winning bid $134K). What chance is there that I could get a discount on the 2nd (which is currently $30K)? What strategy do I use to propose a discount to the second? : Thank you! ==================== Jan, The approach to a junior bene buyout is to get to them early on—about 15 days after the recording of the NOD (notice of default) on the foreclosing 1st trust deed. Your chances of getting the owner of the 2nd to sell out (1/3 to 1/2) to you are high, especially if the bene is a private party and if they're located out of the area. Your story line should be something like, "The foreclosure of the 1st threatens to wipe out your $30K 2nd unless you happen to have the $250K to pay off the 1st. If you don't, then you should consider selling me your 2nd and get something for it, rather than run the risk of getting totally wiped out. I have the resources to neutralize the 1st and the specialized knowledge to deal with any potential bankruptcy, etc. But even so, I don't always prevail either—so that's why I need to work with large margins...." Hope this helps. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : Ward, : : I am tracking a foreclosure property where the 1st is a $250K lien, the 2nd a $30K and a property tax lien of $6K. The property when fixed up will sell from $470K to $500K. I have noticed from attending auctions that the properties sell for considerably more than opening bid (Today: opening bid $30K - winning bid $120K; opening bid $50K, winning bid $134K). What chance is there that I could get a discount on the 2nd (which is currently $30K)? What strategy do I use to propose a discount to the second? : : Thank you! : ==================== : Jan, : The approach to a junior bene buyout is to get to them early on—about 15 days after the recording of the NOD (notice of default) on the foreclosing 1st trust deed. : Your chances of getting the owner of the 2nd to sell out (1/3 to 1/2) to you are high, especially if the bene is a private party and if they're located out of the area. : Your story line should be something like, "The foreclosure of the 1st threatens to wipe out your $30K 2nd unless you happen to have the $250K to pay off the 1st. If you don't, then you should consider selling me your 2nd and get something for it, rather than run the risk of getting totally wiped out. I have the resources to neutralize the 1st and the specialized knowledge to deal with any potential bankruptcy, etc. But even so, I don't always prevail either—so that's why I need to work with large margins...." : 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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