I Need Some Clearing Up..
I was reading this forum and someone mention 2nd position notes are throw aways, is that true? If so, how is that true? I mean, i thought almost every note created by the seller is 2nd position..Can someone please clear this up..
thanks...
Nate is correct, and another way to accomplish this is to sell your property on a land contract, contract for deed or bond for title/deed, take as large a down payment as possible, and collect the spread every month on the underlying loan and the land contract payment, with presumably higher interest rate and higher payment.
This way, when you "sell", the deed does not transfer until ALL installments in the contract are paid and terms are met, so the underlying lien can be kept in place, whereas with an actual owner financed sale and simultaneous closed note sale, you would have to extinguish any underlying liens before the deal leaves escrow, netting the cash left over.
At a later point in time, you can sell your land contract for cash lump sum, at which time the underlying lien woudl have to be extinguished. However, we can also faciliate the sale of a portion of the PROFIT SPREAD between both the underlying loan payment and the land contract payment, giving you a lump of cash for whatever purposes, and allowing you to take over that land contract at a later date to re-enjoy the cash flow.
Many creative options are available. Hope this helps, thanks, Dave
Whats up Dave,
Can you still do a land contract if you still owe a mortgage on the propetry? and is a land contract the same as a wrap around?