The Real Deal Real Estate Show with Larry Harbolt is brought to you by The Real Estate Institute of Advanced Strategies. This show will teach any real estate investor how to buy and sell real estate for long term wealth and prosperity. Listen to real estate investing legends discuss the timeless methods used to acquire real estate. Larry discusses many strategies including but not limited to Seller Financing, Land Trusts, Options, Negotiations, Tax Planning, Asset Protection, Wholesaling, Lease Options, Contract for Deed and many other creative methods that provide a win/win solution for both buyers and sellers.
Today, I want to talk about something that confuses a lot of people, substitution of collateral. It did me for many years. Collateral is the asset you pledge when you get a loan that if you don’t pay as agreed, they can take it away from you. Substitution of collateral is when a lender allows the borrower to transfer the mortgage that the borrow signed to another property that the borrower has that is of equal or greater value.