refi w/privately held second - Posted by nate

Real Estate Investing Real Estate Financing
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Posted by Ed Garcia on January 05, 2001 at 09:30:18:

Nate,

In the future when doing a seller carry back, ask the seller to subordinate their position to a re-fi, rate reduction.

What that means is that the seller will allow you to rewrite your first mortgage for a lower interest rate. This also protects the seller’s second mortgage, because it lowers your monthly payment increasing the cash flow the property.

What I would do right now since you haven’t pre-arranged a subordination, is talk to your second holder and request it now, explaining to them how they will also benefit.

NOTE: Tell them the reason you’re asking for subordination, is because there isn’t enough equity for you to re-finance at this time. Now this gives you an opportunity to set them up for a DISCOUT. There might be a great opportunity to get the second holder to DISCOUNT THEIR NOTE.

Ed Garcia

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refi w/privately held second - Posted by nate

Posted by nate on January 05, 2001 at 04:59:52:

I own 3 duplexes… on 3 seperate mortgages, and there is 1 seller held second for all 3. If I REFI 2 of the mortgages, does the second have to paid off then, or can it continue throughout the rest of the term?

thank you for your help!