In this video, you will learn the “Multi-Mortgage” technique.
This is a great way to structure a deal so that it gives the seller some of his equity and makes it more likely for them to do the deal.
If you understand all of the structures in my hierarchy, you will be able to make an offer on ANY property so that it is profitable to you and likely to be accepted by the Sellers.
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Read Transcript for “How To Buy With The Multi-Mortgage Technique To Give The Seller His Equity”
What are “Multi-mortgage” deals and in what circumstances should they be used, and how do you use them to give the sellers their equity? In this video, I’ll explain it to you and how to do it in ways that profit you as well.
Joe: Second in this structure is called “Multi-mortgage”. This is a structure that I created simply because there weren’t any others out there. You’re still taking the property Subject-To but this time, that property may have some equity in it.
Joe: When you take most properties Subject-To, they’re going to have mortgages up to the value of their property or within 70-80% of their value and it’s easy to take those properties over and get that equity for free. But let’s say somebody has a property and they only have a mortgage on it that’s 20% of their equity. Let’s say it’s a property that’s worth $100,000 and they owe $20,000 on the mortgage right now.
Joe: What you can do is take that property from them, buy that property from them with Multi-mortgage and get them their equity. Let’s say it makes sense for you to pay them $400,000 for that property and let’s say it’s worth $100,000. You’re going to be able to get $1,000 of income on it and your payments overall aren’t going to be more than say $900 a month with taxes and insurance and property management – that property might make a lot of sense to take over.
Joe: So to do that, what you have to do is put a second mortgage on there. The seller deeds you the property, you start making payments on the first mortgage or first trust deed that’s on the property, and then we have a second mortgage that’s on the property where the beneficiary is the owner or the seller of the property. So they’re going to have an $80,000 second on that property that you’re going to make payments to. If you default, they can take the property back from you, so they’re protected, and you – you’re on the deed so you’re protected and you’re given a stronger position because you’re on the deed. And you’re going to make payments to them.
Joe: Alright, so that’s the top two structures, “Subject-To” and “Multi-mortgage”. Of course, as you go down the structures, you have less and less control of these deals. It doesn’t mean it doesn’t make sense to do them. “Multi-mortgage” usually makes just as much sense as a Subject-To, although I’d much rather see you negotiate a much smaller price when you do a Multi-mortgage.
