Key Takeaways
- Three principles: merit, mutual benefit, risk-adjusted advantage.
- Multi-variable negotiation unlocks creative financing value.
- Risk scoring prevents unacceptable risk deals.
- Track 3 covers execution and compliance.
This lesson reviews the underwriting and decisioning frameworks from Track 2.
Underwriting Review
Three principles: deal merit, mutual benefit, risk-adjusted advantage. Subject-to: rate arbitrage. Wrap: two-layer spread. Seller financing: variable trade-offs. Lease option: exercise probability.
Negotiation Review
Multi-variable negotiation is the core skill. Five-step decision framework. Risk scoring matrix (30-point). Professional term sheets.
Preview
Track 3: execution and compliance—closing, payment management, regulations, exit strategies.
Go / No-Go Decision Framework
Go Indicators
- ✓Three principles: merit, mutual benefit, risk-adjusted advantage.
- ✓Multi-variable negotiation unlocks creative financing value.
No-Go Indicators
- ✗Skipping the risk scoring step because the deal looks profitable on the surface: Hidden risks (unreliable seller, legal issues) that destroy deal economics emerge post-closing
- ✗Using the same negotiation approach for every seller regardless of their situation: Missed opportunities to structure optimal deals for different seller motivations
Sources
Common Mistakes to Avoid
Skipping the risk scoring step because the deal looks profitable on the surface
Consequence: Hidden risks (unreliable seller, legal issues) that destroy deal economics emerge post-closing
Correction: The 30-point risk scoring matrix is mandatory for every creative deal — no exceptions.
Using the same negotiation approach for every seller regardless of their situation
Consequence: Missed opportunities to structure optimal deals for different seller motivations
Correction: Match your negotiation strategy to the seller's specific situation, priorities, and concerns.
Test Your Knowledge
1.Primary value driver in subject-to?
2.Lease option exercise rate?
3.Risk score for restructure/decline?