REI WEALTH MONTHLY Issue 36 (The Best of REI Wealth Monthly) | Page 12

Creative Real Estate Financing and Acquisition Strategy # 4

CREATIVE REAL ESTATE FINANCING AND ACQUISITION 101 MATT THERIAULT

Subject­To

• A / K / A : Buying Subject to Existing Financing , among other terms .

• 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 .

• 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

• A / K / A : Land Contract , Contract for Deed , Buying on Contract , Installment Sale , Seller Financed , among other terms .

• 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 .

• 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 Carry­Back Mortgage

• A / K / A : Private Mortgage , Seller Financed , Seller Carry Back Trust Deed , among other terms .

• 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 .