Subordination Clauses and Wrapping? - Posted by David Alexander

Real Estate Investing
1

Posted by David Alexander on June 15, 1999 at 23:11:14:

Thanks, Michael

Is there any boiler plate subordination language you have already. I tend to right my own stuff and then run it by the attorney, saves time and money.

You’ll be hearing from me probably before the week is out about a note I’m going to sell, waitin to get all my paperwork ducks in a row.

thanks,

David Alexander

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Subordination Clauses and Wrapping? - Posted by David Alexander

Posted by David Alexander on June 15, 1999 at 17:59:36:

I’ve structured some good financing on a property, where the seller will carry a second for a couple of years.

My intent is to sell the property. I am going to need to go ahead and close the deal, with some interim financing(a new first). When I actually close the deal with a new buyer I am going to need a good clause that will keep the second subordinate to a new first(for the second time, first was with my interim financing) until the balloon is up.

Any good clauses, wording etc…

Also, this is going to sound strange, but how or is it possible to wrap a second mortgage only, leaving the first in tact.

David Alexander

3

Re: Subordination Clauses and Wrapping? - Posted by Michael Morrongiello American Note

Posted by Michael Morrongiello American Note on June 15, 1999 at 22:54:13:

David:
There are many subordination clauses that attorneys can provide you to review. This concept is nothing new and is many times used with land development where the land seller agrees to subordinate to other financing so that the buyer can improved the land.

Secondly:
It is possible to wrap only a 2nd lien note IF you allow the payor who is to be responsible to make payments to simply pay the underlying 1st lienholder direclty. Any payments on the wrap you would be holding woud then first come into you and then you woudl continue to service the existing 2nd lien that is agaiinst the property.

Hope this helps

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Michael Morrongiello