Grow your real estate investing business with the most competitive and transparent private lender for bridge loans (hard money, fix & flip, rehab, ground up construction), DSCR rental loans.

Private Lender for DSCR Loans and Fix & Flip Loans | OfferMarket

Private Lender for DSCR Loans and Fix & Flip Loans

A fourplex is another word for quadplex. Please visit our [quadplex](https://www.offermarket.us/real-estate-glossary/quadplex) overview to learn more. 

 

#### Related concepts:

 

- [SFR](https://www.offermarket.us/real-estate-glossary/sfr)
- [Duplex](https://www.offermarket.us/real-estate-glossary/duplex)
- [Triplex](https://www.offermarket.us/real-estate-glossary/triplex)
- [Quadplex](https://www.offermarket.us/real-estate-glossary/quadplex)
- [House Hacking](https://www.offermarket.us/real-estate-glossary/house-hacking)

A fourplex is a 4-unit house. Fourplexes are very attractive to rental property investors. There's more to learn about fourplexes at OfferMarket. 

Fourplex - OfferMarket real estate glossary

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Fourplex - Real Estate Glossary - OfferMarket

What is Fourplex in real estate?

An appraiser is a licensed real estate professional who has completed at least 150 hours of courses and accumulated 1,000 hours of experience. No college degree is required.


 

## Related terms
- [Certified General Appraiser](https://www.offermarket.us/real-estate-glossary/certified-general-appraiser)
- [Certified Residential Appraiser](https://www.offermarket.us/real-estate-glossary/certified-residential-appraiser)
- [Trainee Appraiser](https://www.offermarket.us/real-estate-glossary/trainee-appraiser)

A Licensed Residential Appraiser is a licensed real estate professional who has completed at least 150 hours of courses and accumulated 1,000 hours of experience. No college degree is required.

Licensed Residential Appraiser - Real Estate Glossary - OfferMarket

What is a Licensed Residential Appraiser?

A real estate appraisal is the process of developing an opinion of value for real property. Appraisals are performed by licensed real estate appraisers.

 

Appraisals differ from Broker Price Opinion (BPO) and Real Estate Valuation in that appraisals can only be performed by licensed real estate appraisers.

 

You can receive a [free real estate valuation estimate](https://www.offermarket.us/tools/free-real-estate-valuation), compliments of OfferMarket.

Real estate appraisal is the process of developing an opinion of value for real property. Appraisals are performed by licensed real estate appraisers.

Appraisal - Real Estate Glossary - OfferMarket

What is a real estate Appraisal?

An individual training to become a licensed real estate appraiser who has completed at least 75 hours of education.

 

## Related terms
- [Certified General Appraiser](https://www.offermarket.us/real-estate-glossary/certified-general-appraiser)
- [Certified Residential Appraiser](https://www.offermarket.us/real-estate-glossary/certified-residential-appraiser)
- [Licensed Residential Appraiser](https://www.offermarket.us/real-estate-glossary/licensed-residential-appraiser)

A Trainee Appraiser is an individual training to become a licensed real estate appraiser who has completed at least 75 hours of education.

Trainee Appraiser - Real Estate Glossary - OfferMarket

What is a Trainee Appraiser in real estate?

## What is a mortgagee clause?

 

A mortgagee clause typically is a provision included in a property insurance policy protecting the mortgagee (lender) from financial loss in the event mortgaged property is damaged -- physical or otherwise. Put another way, a mortgage clause is insurance coverage between the lender and property insurance company that protects the lender and their interest in the property. Most commonly this protects lenders downside when there is physical damage done to the property and it was not initially reflected in the valuation of the property. This clause is often added to homeowners insurance policy (and increases its costs for the homeowner) and is required by mortgage lender to be able to extend a mortgage loan. 

 

In other words, if the property suffers damage, the insurer agrees to financially compensate the mortgagee for their portion of the loss. This is a risk reducing mechanism that enables a vibrant and hyper active lending system which makes it easier for borrower to get a loan, for mortgage originators to function and underwrite such loans and for mortgage investors to repurchase packaged loans in the secondary markets. More on these mechanics below...

 

## Protection for the lender helps the lending system function

 

The main purpose of the clause is to provide protection to the mortgage lender so their returns on extending a loan for the property is protected in case of substantial damaged or even destroyed. This mechanism allows for shifting of risk from mortgage lender to the insurer, so in case of a cataclysmic event the financial burden is split, which allows for mortgage lenders to extend far more loans to the buyers, allowing more families to move into their homes and enjoy benefits of home ownership. Risk is an important consideration for lenders because thats a useful tool for quantifying their exposure to downside financial risk inherent to their business. Shifting this risk or distributing it between parties within the transaction is an important mechanism that allows creation of new, more sophisticated, and robust systems that allow more access to capital at cheaper rates, allowing everyone who are part of the system to thrive. 

 

Without this mechanism, mortgage lenders would need to be much more risk averse and tightening their lending standards. Which would impact buyers ability to purchase homes. Usually this would mean that buyers would have to put more money down to purchase a property, have higher credit scores, buyer lower valued properties, some areas would be underbanked due to higher perceived risk from the lender, or they would required co-guarantors or co-signers, overall making a loan issuance a much harder process for the borrower. 

 

## Protection of the clause doesn't just protect the original lender

 

The protection granted by the clause doesn't just protect the original mortgage lender. The clause includes [ISAOA]("https://www.offermarket.us/real-estate-glossary/isaoa-atima"), or "It's success and/or assigns" term, sometimes written as "successors and or assigns", which means that the insurance protection extends or grants continuing to any financial institution that may repurchase the mortgage loan from the original loan issuer. This is done because, given how the current mortgage loan industry is structured, most commonly, originator of the loan, the first company that issues doesn't hold it to maturity, for the whole 30 year or 15 year term. Instead they package many such loans together into whats called a vintage and sell them to investors that do hold them for 15 to 30 years in order to collect the coupon payments. 

 

These investors also want to be protected from potential damage to the property under home owners insurance for the duration of the loan, which is often substantial. If this extension under [ISAOA]("https://www.offermarket.us/real-estate-glossary/isaoa-atima") didn't exists, this secondary market would evaporate overnight, and originators (first issuer of the load would have to hold them until maturity), which would cascade into much stricter rules on original issuance due to much higher risk they would bear, ultimately making it significantly harder for buyers to get a loan. 

 

The protection of the clause often covers not only originator (original mortgage lender), mortgage investor (buyer of mortgage loan packages from the original lender) but also to any company that also works with already protected party. For example, if there are some subcontractor, rental equipment operators, or vendors working on the property and their equipment gets damaged while they are doing anything for the insured parties (home owner or their lender), the [ATIMA]("https://www.offermarket.us/real-estate-glossary/isaoa-atima") protection kicks in and covers them under the mortgagee clause, leaving the insurance on the hook instead of homeowner or the lender, making them a loss payee instead of the lender or homeowner.

 

Once again, this is done to further reduce risk for the lender so the whole lending system can continue issuing loans and make insurers deal with actual, often physical risks of home ownership, while lenders are only exposed to the risks carried by the personal profile of the homeowner, such as their personal ability to pay down the loan for its duration.


## How to add a mortgagee clause

 

If you are a [private lender](https://offermarket.us/real-estate-glossary/private-lender) providing a private loan to a real estate buyer (borrower), you can have the borrower contact their property insurer to add a mortgagee clause with you as the mortgagee. Almost all home insurance companies have experience with adding these clauses because any government backed mortgage loan must include such a clause to make it count as a standard loan that can be packaged or securitized into vintage which then can be resold in secondary markets for investors to hold until maturity. 

 

Here is a mortgagee clause for an OfferMarket single family rental property that is insured by [Steadily Insurance](https://partner.steadily.com/partner/?ref=offermarket):

 

[OfferMarket Capital LLC](https://docs.google.com/forms/d/e/1FAIpQLScaxH1N15scn_MlyAfbTYDBI_7Z3_hpaoqNuqG3mDGvHE2rbg/viewform?usp=sf_link) ISAOA/ATIMA
627 S Hanover St
Baltimore, MD 21230

 

## [Introducing OfferMarket Capital](https://docs.google.com/forms/d/e/1FAIpQLScaxH1N15scn_MlyAfbTYDBI_7Z3_hpaoqNuqG3mDGvHE2rbg/viewform?usp=sf_link)

 

Take your real estate investing to the next level with OfferMarket Capital. Access the most competitive and transparent rates on bridge loans (fix and flip) and 30 year fixed rate rental loans (purchase and refinance). 

 

## Concepts related to Mortgagee Clause

 

- [ISAOA/ATIMA](https://www.offermarket.us/real-estate-glossary/isaoa-atima)
- [Mortgage Loan Originator](https://www.offermarket.us/real-estate-glossary/mortgage-loan-originator)
- [Landlord Insurance](https://www.offermarket.us/real-estate-glossary/landlord-insurance)

A mortgagee clause is a provision included in a property insurance policy protecting the mortgagee (lender) from financial loss.

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Mortgagee Clause - Real Estate Glossary - OfferMarket

What is a Mortgagee Clause?

## What is a double closing?

 

A double closing is when a buyer purchases a property from a seller and then immediately sells the property to another buyer, capturing the difference as profit.

 

In a double close, there are two (2) separate transactions that happen in a very short period of time, in many cases on the same day.

 

- Transaction 1: Seller sells to Buyer (Wholesaler)
- Transaction 2: Wholesaler sells to Buyer (End Buyer)

 

## What is an example of a double closing?

 

For example, let's say Jane (Seller) accepts an offer to sell 123 Main St to Tom (Wholesaler) for $100,000. Tom, in many cases using "transactional funding", purchases the property for $100,000. On the same day, Tom sells 123 Main St to Mike (End Buyer) a local flipper, for $120,000. Tom's gross profit is $20,000 and his profit net of fees is $10,000.

 

## What is the difference between a double close and assignment of contract?

 

In an [assignment of contract](https://www.offermarket.us/real-estate-glossary/assignment-of-contract) wholesale transaction, the wholesaler ("Assignor") is technically selling the contract to another person or entity ("Assignee") who takes over responsibility to close the transaction with the seller.

 

An assignment agreement is used to memorialize the fact that the Assignee is taking over the role of buyer and paying an assignment fee to the Assignor. The assignment fee is commonly paid to the Assignor at closing, and included on the [HUD-1 settlement statement](https://www.offermarket.us/real-estate-glossary/hud-1).

 

In this type of wholesale transaction, there is only one transaction and the seller may not be aware that the original buyer (Wholesaler) is assigning the contract for a fee. [Contract Of Sale](https://www.offermarket.us/real-estate-glossary/contract-of-sale) (otherwise known as "Purchase And Sale Agreement" or "Purchase Contract") are assignable by default and sellers who wish to avoid assignment are required to stipulate this in the contract.

A double closing is when a buyer purchases a property from a seller and then immediately sells the property to another buyer, capturing the difference as profit.