Over the past two weeks, I have been pretty excited about a pre-foreclosure property that’s on the inner-coastal waterway, but as a beginning investor, one thing I overlooked was to first make sure that the owners are motivated.
Even though their $300k loan has ballooned to $322k in less than 8 months (10.5% rate, 15yr fixed), the value of the land is still worth enough for the owners to refinance and get another loan to pay off their current loan.Â
The owners have at least two law suits against them for lack of payment. But with the new mortgage they took out, they should be able to pay off all the debt. They did this once before in June 2005 to pay off their original mortgage of 200k and another loan for 15k. But with the way they are going, they’ll probably default on their new higher balance loan in a few month.
I will keep tabs on this one, but I think that particular unit is a lost cause for now.