14) Graduated Payment
Mortgage (GPM)” – is a note engineered Conclusion
such that interest and/or payments start low, then every transaction, nor would sellers agree to all of
increase gradually over the years. It makes for them. The objective is for buyers to negotiate as
easier ownership but can become a trap in the many that are advantageous as they can!
Clearly, these note terms are not appropriate for
later years. For this reason, the DoddFrank
legislation prohibits this type of loan on 14 unit
Good luck!
owneroccupied properties, but it is still legal for
Bruce Kellogg has been a
investment property transactions of all kinds.
Realtor® and investor for 36
years. He has transacted about
15) “Shared Appreciation
Mortgage (SAM)” – is a popular note term
500 properties for clients, and
about 300 properties for himself
when prices are high and still rapidly rising, or
in 12 California counties. These include 14 units,
when interest rates are high. The note is written
5+ apartments, offices, mixeduse buildings, land,
so that the seller receives payments that are “sub
lots, mobile homes, cabins, and churches. He is
market”, but also receives a percentage of the
available for listing, selling, consulting, mentoring, and
property’s appreciation upon sale or maturation of
partnering. Reach him at [email protected],
the note. It is useful, but not very common.
or (408) 4890131.
66
Seller-Carryback Note Terms