CREATIVE REAL ESTATE FINANCING AND ACQUISITION 101 MATT THERIAULT
Creative Real Estate Financing and Acquisition Strategy #4
Subject-To
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A/K/A: Buying Subject to Existing Financing, among other terms.
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Often Appropriate When: Seller must sell fast. Seller trusts you (and you are worthy of that trust). You
have too many mortgage loans and you can get another. Seller has difficulty selling traditionally. Seller is in
arrears on mortgage payments. Property is in disrepair. Property is “investment” property.
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When to Avoid: Avoid selling or leasing back to the “owner occupant” Seller. Avoid this if there is a balloon
payment or an interest rate adjustment coming soon. Avoid if the existing mortgage puts you, the Buyer, in
an upside down cash flow or equity situation. Avoid if the lender strongly objects.
Creative Real Estate Financing and Acquisition Strategy #5
Agreement for Deed
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A/K/A: Land Contract, Contract for Deed, Buying on Contract, Installment Sale, Seller Financed, among
other terms.
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Often Appropriate When: Seller is concerned about “due on sale” clause. Seller wants a specific market
value price and will concede to below market interest. Seller is selling “investment” property. Seller is
stable.
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When to Avoid: Avoid if the Seller is in extreme financial trouble (i.e. facing bankruptcy or divorce).
Creative Real Estate Financing and Acquisition Strategy #6
Seller Carry-Back Mortgage
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A/K/A: Private Mortgage, Seller Financed, Seller Carry Back Trust Deed,
among other terms.
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Often Appropriate When: Seller wants a specific market value price and
will concede to below market interest. Seller has no better investment
options and likes the idea of a fixed rate of return over a long period of
time.