CREATIVE REAL ESTATE FINANCING AND ACQUISITION 101 MATT THERIAULT
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When to Avoid: Avoid unless the Seller provides a title insurance policy clearing all items to which you, the
buyer, object.
Creative Real Estate Financing and Acquisition Strategy #7
Wrap Around Mortgage
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A/K/A: Wrap, All Inclusive Wrap Around Mortgage, All Inclusive Wrap Around Trust Deed, AITD, Seller
Carry-Back Wrap, among other terms.
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Often Appropriate When: Seller has much equity and a low balance existing loan compared with the
property value. The interest rate on the Seller’s loan is low. The existing loan has a lot of seasoning (the loan
is many years old). Seller has no better investment options and likes the idea of a fixed rate of return over
time.
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When to Avoid: Avoid this if there is a balloon payment or an interest rate adjustment coming soon.
Creative Real Estate Financing and Acquisition Strategy #8
IRA Investing
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A/K/A: Self-Directed Retirement Account Investing, HSA Investing, Self-Directed 401K Investing, among
other terms.
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Often Appropriate When: Seller will discount the price deeply for cash. Property needs a lot of repairs.
Prope rty has potentially great cash flow. Seller is willing to do any of the above strategies non-recourse.
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When to Avoid: Avoid anything high risk or that will cash flow negatively.