structuring second mortgage - Posted by Larry

Posted by Steve-Atl on March 22, 2000 at 09:07:07:

I would structure it to give you the best yield possible and the greatest protection possible. Since it is worth little on the note buyers market, why not make it worth your while by creating favorable terms.

Try this on for size: 15.9% interest, 6 points to be added to loan balance, interest only payments for 18-24 months, then a balloon. You get a good yield (19%+) and the buyer gets lower interest only payments until they can refinance.

Regarding security, the key with second mortgages is staying aware of the status of the first. You have to be ready to quickly step in to bring the first current and foreclose to protect your interests.

structuring second mortgage - Posted by Larry

Posted by Larry on March 22, 2000 at 06:01:55:

I’ll be selling a rehab in a few days and am willing to hold a second mortgage to help sell it. I realize that the second will be pretty well worthless but my profit is still acceptable to me without it. How should I structure the second to protect myself as well as make it appealing to the buyer? Any help would be appreciated! Larry