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Updated about 1 year ago, 10/19/2023

User Stats

10
Posts
6
Votes
Eric Lowe
Pro Member
  • Real Estate Broker
  • San Diego, CA
6
Votes |
10
Posts

Shared Appreciation Loan

Eric Lowe
Pro Member
  • Real Estate Broker
  • San Diego, CA
Posted

Hello, I am evaluating the pros and cons of a shared appreciation mortgage (SAM). The context: I want to finance the construction of a 2-unit ADU in San Diego. I have an existing 1st position DOT on this property, so the SAM would be a 2nd. I have no intention of selling the property, so a SAM with a phase-out provision on the amount of appreciation shared seems like a good way to reduce the cost of borrowing and to hang on to more of my own cash reserves during construction.

Question: what experience does anyone have taking on this sort of loan? And what tips do you have for someone seeking out this loan product?

Thanks in advance,

Eric

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