Page 194 - Trump University Commercial Real Estate 101

TRUMP UNIVERSITY COMMERCIAL REAL ESTATE 101

the prepayment penalty burns off. You can hold the property, refi nance
it, and watch your cash fl ow soar.

There ’ s Plenty of Room for Creativity

You might very well get your deal funded through conventional
lenders, especially if you provide that professional loan package. But
what if the usual lenders say “ no, ” for whatever reason?
Don ’ t despair, because a great many commercial properties are

financed using imaginative approaches. I mentioned some of these
earlier, but they ’ re important to cover again.

It ’ s common to negotiate seller financing on deals, but the specifi c
terms can vary widely. You can pay all of the principal sometime out in
the future and not offer the seller any interest whatsoever. As odd as
that offer may sound, sellers sometimes agree to it.
You can offer the seller an interest rate but no current payment.
Instead all interest will be paid when the loan matures or ends. This is

good because it does not cut into your cash flow. Or you might struc-
ture simple interest payments to be paid monthly. You could up your
offer with principal and interest payments to be paid monthly.
Don ’ t forget that the seller can even give you the fi rst mortgage
for the property, and not only a second. Perhaps the seller would like a
monthly annuity, but doesn ’ t want the hassles of management. Carrying

a first mortgage, or taking back paper , as it ’ s called, would allow the
seller to achieve this goal.
You could do a wraparound mortgage. With this approach, you
pay the seller one lump sum to cover both the existing fi rst mortgage
and the second mortgage. This allows the seller to account for the

payment of the first mortgage, so that if you did not make payments,
the seller could get the property back.
It ’ s possible to transfer IRA, Keogh, Roth, and SEP money into a
true self - directed IRA and invest that money into real estate. You may

or may not have significant funds in those vehicles, but there are plenty

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