The Art of Adding a Second Mortgage

[Jorge Vazquez]

I recently encountered a situation where an investor almost backed out of a deal because he didn’t realize we were going to record the second mortgage after the first closed—not simultaneously. That timing matters a LOT. Lenders almost always require first position, and if they see a second being recorded at the same time, they’ll usually shut it down. But once that first mortgage is locked in, they honestly don’t care what comes next. So we helped him close clean, then dropped in a second lien to give him back $10K for the flip—no drama. Cody, Lisa, and I got on the phone with him to walk through it all, and once he saw the math and the flow, he was back in the game. This is one of those creative finance moves that seems tiny but can completely change how fast you recycle your capital. I’ve done this for years—as long as you’re transparent and don’t spook the lender upfront, this can be a slick way to get liquidity without needing a hard money refi right away. Definitely not something I’d recommend for beginners, but for those of us who know the closing table inside and out, it’s a powerful tool. We even wrote a quick article about it for our investor community. It’s called “First Lien, Then Hustle” because that’s exactly how we treat it. Lock the first. Then move. Curious if anyone else is doing this type of post-close lien stacking or if you’ve had a lender push back after the fact? Let’s swap notes. Always love hearing how others are structuring creative deals out there.