When selling a property you agree to hold a 2nd mortgage for part of the balance. For example, the buyer may go out and get a 80% LTV mortgage, ask you to hold a 10% second, and then put only 10% down.
In this area holding back a second is a usual occurance for REI's. I have done many loans where this has taken place.
About 40% have completely paid the seller accordingly, about 30 percent paid for awhile, and about 25% never pay. If an LLC or even you personally hold it, and they don't pay it can be written off as a bad debt :-( :-(
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What does "Holding back a 2nd" mean?
When selling a property you agree to hold a 2nd mortgage for part of the balance. For example, the buyer may go out and get a 80% LTV mortgage, ask you to hold a 10% second, and then put only 10% down.
In this area holding back a second is a usual occurance for REI's. I have done many loans where this has taken place.
About 40% have completely paid the seller accordingly, about 30 percent paid for awhile, and about 25% never pay. If an LLC or even you personally hold it, and they don't pay it can be written off as a bad debt :-( :-(
[addsig]