Owner Financing & Note Investing Podcast with Dawn Rickabaugh · Dawn Rickabaugh | Expert Advice for building wealth through Owner Financing & Note Investing

Foreclosing on a Private Real Estate Loan from First Position When You Want the Property

·49 min·4 clips

First position gives powerful leverage

Dawn opens with Property and Paper Live and frames the conversation around seller financing and note investing. She makes the case that even a basic understanding of the note business can make someone a stronger real estate investor. She also mentions putting together a very custom solution for someone while balancing family obligations and a river rafting trip, which gives the session a live, in-motion feel instead of a polished broadcast. From there, the discussion shifts into a foreclosure scenario. The room starts sorting through lien priority, secured claims, and what happens when there may be surplus funds after a foreclosure. Dawn keeps the talk tied to actual deal behavior instead of abstract rules. The conversation gets more specific about who is doing the foreclosing. Dawn clarifies that there are two lenders, she and a good friend, and that a company is handling the foreclosure process for them. That distinction matters because the group is trying to understand who is acting as principal and how that affects the outcome. The exchange circles around whether any money left over would go to the second position, another lienholder, or somewhere else after the first is satisfied. A few different possibilities get tested out loud. Someone raises the idea that a second lien or tax lien might absorb whatever is left. Dawn pushes back and asks where surplus funds would actually go if there is money remaining. She also notes that if the second does not file, she would want to see what the trustee does with the funds. The discussion is not tidy, but that is part of what makes it useful. The talk also reaches into practical experience. Dawn says she has filed in second position before and got paid. She mentions that in Texas, they had to research who the rightful recipient of surplus funds should be, including looking into the estate if needed. That widens the episode from a single case into a broader reminder that foreclosure outcomes can depend on jurisdiction and on who is properly identified in the process. There is also some uncertainty, and the episode leaves room for it. Dawn admits she has not done a ton of foreclosures, especially in California. That kind of honesty shapes the tone. Instead of pretending certainty, she keeps qualifying the answer and checking the logic with the room. The episode then returns to the wider strategy behind the deal. Dawn explains that she wants owner-financed property with very small discounts, almost nothing, and notes that she is looking for front-end partials and very secure positions. Her goal is to build investments that can be offered to clients as safe, real-estate-backed opportunities. She emphasizes that she likes to be in at land value or below, so that even if property values fall, the position stays protected. That part of the discussion gives the episode its larger shape. The foreclosure question is not isolated. It becomes part of a bigger philosophy about finding clean collateral, structuring notes carefully, and creating financial solutions that feel durable to both the seller and the investor. Dawn keeps speaking in the language of practical investing, not classroom theory. The pacing is brisk and conversational. She repeats a few ideas, corrects herself midstream, and keeps the thread moving with ordinary speech rather than scripted polish. Callers and participants help shape the direction of the talk, and the episode feels like a live room thinking through a real transaction. The result is part education, part case study, and part deal-making mindset. By the end, Dawn brings the conversation back to her larger mission. She wants to help people understand note investing well enough to use it as a tool for safer, smarter real estate decisions. The closing spirit is simple and direct: build financial solutions, keep them grounded in collateral, and make them work in the real world.

As heard by us

A practical note investing discussion of seller financing, lien priority, and surplus funds.

Dawn Rickabaugh walks through seller financing, note investing, lien priority, and the way surplus funds come into play when foreclosure enters the picture.

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Need to think through a first-position foreclosure without getting lost in theory?

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