Posted by Michael Morrongiello on September 12, 2006 at 14:08:12:
Dewayne:
My short answer is DO NOT CARRY such a high risk so called “throw away” 2nd lien as the risk associated with being in a juinor lien position behind such a LARGER underlying 1st lien is very tenuous and risky at best…
My suggestion is to offer to owner finance the sale of the property ENTIRELY and get a buyer who has STRONG credit and a decent 20%+/- cash down payment.
Now you agree to hold the balance of the purchase price due with an ownner financed “wrap around” type lien (or possibly a 1st lien- assuming your “paper” can be converted quickly to cash) - which can be then converted into a lump sum cash payout. From these cash funds that will be generated to you resulting from the sale of the owner financed “paper” you will pay off your existing debt. Now your owner financed lien becomes a 1st lien!
Don’t allow the buyer to go obtain an institutional 1st lien and have you relegated to a VERY risky subdordinate 2nd lien position Note which has limited appeal to most anyone.
Best to your succcess;
Michael Morrongiello
www.sunvestinc.com
Author of the Unity of Real Estate & “paper” home study course