My 2nd "flip" (if you want to call it that) was done by purchasing the 2nd.
I think you mentioned it but it bears repeating, the 2nd mortgage will be wiped out if the property goes to foreclosure.
We had 3 exit strategies when we bought our 2nd. 15k for a 22k 2nd.
1. Let the property sell. You get paid for the current owed value of the note regardless of what you paid for it. A great way to make some money with little to no effort. We knew the owner was trying to sell the property. It had already been on the market 2 months.
The next 2 options involve exercising the first right of refusal. In CO the 2nd note owner has first rights.
2. Flip the property.
3. Rent the property.
We had a hard money lender lined up that would not only buy out the first but also the 2nd on the property. Hence pulling all of our money back out of the deal.
As luck would have it the property went under contract 1 week after we bought the 2nd. We made 7k doing pretty much nothing.
Now to get back to your question. Contacts are everything. Our partners had contacts at several major banks and they knew when certain notes might be available. They made the offer, we provided the capital. Not sure if I exactly answered what you are looking for, but I hope some of that info is useful.
I think you mentioned it but it bears repeating, the 2nd mortgage will be wiped out if the property goes to foreclosure.
We had 3 exit strategies when we bought our 2nd. 15k for a 22k 2nd.
1. Let the property sell. You get paid for the current owed value of the note regardless of what you paid for it. A great way to make some money with little to no effort. We knew the owner was trying to sell the property. It had already been on the market 2 months.
The next 2 options involve exercising the first right of refusal. In CO the 2nd note owner has first rights.
2. Flip the property.
3. Rent the property.
We had a hard money lender lined up that would not only buy out the first but also the 2nd on the property. Hence pulling all of our money back out of the deal.
As luck would have it the property went under contract 1 week after we bought the 2nd. We made 7k doing pretty much nothing.
Now to get back to your question. Contacts are everything. Our partners had contacts at several major banks and they knew when certain notes might be available. They made the offer, we provided the capital. Not sure if I exactly answered what you are looking for, but I hope some of that info is useful.