Editing 1course Real Estate (section)

==== Advanced Subject-To Techniques ====
Implementing advanced Subject-To techniques can enhance your profitability and provide more flexibility in your deals. Here are some strategies to consider:

# '''Wraparound Mortgages:'''
#* '''How It Works:''' A wraparound mortgage involves creating a new loan that “wraps around” the existing mortgage. You collect payments from the buyer and use them to pay the original mortgage, keeping the difference as profit.
#* '''Benefits:''' Wraparound mortgages can provide higher returns, allow you to control the terms, and offer a solution to buyers who can’t secure traditional financing.
#* '''Example:''' Suppose you acquire a property Subject-To with a $100,000 mortgage at a 4% interest rate. You sell the property with a wraparound mortgage for $150,000 at a 6% interest rate. The buyer pays you, and you use those payments to cover the original mortgage, keeping the interest difference as profit.
# '''Subordination Strategies:'''
#* '''How It Works:''' Subordination involves negotiating with the seller’s lender to change the priority of the mortgage lien. This can allow you to obtain additional financing without paying off the existing mortgage.
#* '''Benefits:''' Subordination can provide access to more capital, allowing you to finance improvements, cover costs, or invest in additional properties.
#* '''Example:''' If you acquire a property with an existing $100,000 mortgage and negotiate subordination, you could secure a second loan for $50,000. This additional financing can be used for property upgrades or other investments.