For The Pros
Does this make sense to short?
Owner has bought a new house, and willing to let his current house go into foreclosure. He has filled bankruptcy and it has been discharged. He has already got his keys to his new house. Here are the specs:
He has 3 mortgages 1st =64K, 2nd =16K, 3rd =24K combined to equal 104K. I want to attempt a short on the 2nd and 3rd. Realistically the house is in good shape, prolly worth 104K. The only leverage I have is that the owner has deceided to let the house go into foreclosure since he has his new house. Also I prolly can show comps avg comps at 85K.
Is this worth my time, what's the chance of a successful short?
You might have a good shot with the second position second. The first has no motivation, and the first position second would have to be convinced that the property is worth less than your initial estimate of $104,000.
So you are saying only go after the 3rd Mortgage? Or both 2nd and 3rd?
As I read it, the message is to try both, though you will most likely only succeed with the 3rd.