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Buy To Let Investment Property
Raising Cash with Subordination & Substitution of Collateral
by William Bronchick
Subordination and substitution of collateral are two fancy real estate techniques that can be used to raise huge sums of cash from real estate.
In order to understand subordination and substitution, you must first understand the basics of mortgages. A mortgage (also called a "deed of trust" in some states) is a lien placed on a property as collateral for a loan. Unless otherwise stated, mortgages are "first in time, first in line." A first mortgage is a desirable position, since a foreclosure on a mortgage can wipe out all mortgages that are behind it (called "junior lien holders").
Subordination
Subordination is asking someone who holds a mortgage (or deed of trust...
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