Removing the Blanket & Subordination

Present Condition - An exchangor has a large parcel of undeveloped land that he has had on the market for $5,000,000.00, this was a reasonable price at one time, but the market has been changing and the only offers he has received have been unacceptable to him.

A developer has several homes that were sold pre-construction, but buyers are having a problem closing on those homes, and he is concerned he may have to discount those homes allowing buyers to close.

The value of those homes when closed will be worth approximately $6,500,000.00

Possible Resolution – The developer and landowner work together to solve each of their problems.

The developer creates a blanket mortgage for the unsold homes.

The landowner subordinates his position in his undeveloped land to the developer.

Resolution – As each home closes the developer will release an agreed upon amount to the landowner.

Benefits to Developer –The developer who has good credit, and along with the landowner subordinating his land, has the ability to move forward in developing the land,
with out having to drastically reduce the prices on his homes and will not have to wait to close on his present homes.

Benefits to Landowner –Working with the developer by subordinating his land he will receive his original asking price, and have great collateral while the deal unfolds

Present Condition– As an exchangor, you are interested in acquiring a property that contains a house that needs to be remodeled and includes acreage that can be subdivided.

Your interest is to rebuild the house, subdivide the property allowing you to build four homes.

Resolution - You write a contract that spells out to the seller that with a small down payment the seller will take back a note on the remaining balance.

The contract also says that when each house is either remodeled or built and then sold, the mortgage will be reduced by a specific amount.

This procedure is referred to as removing the Blanket

Benefit to You – You purchase the property with a small down payment and agreed terms, which may or may not include making monthly payments to the seller.

When you sell each house you are also selling a parcel of the land at a much higher value than what you paid for it, while reducing your monthly payments, this also gives you more money to work with to build the next house.

Benefit to Seller – The seller moves a piece of property that has been difficult to sell.

He collects monthly payments, and along with receiving chunks of money each time a parcel is sold, his risk is being reduced.

Win – Win - Win

Removing the Blanket

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or call Wayne H. Wagie 786-326-4747

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