A wraparound mortgage, or wrap, is a form of seller financing in which the seller's existing mortgage stays in place while the seller creates a new, larger mortgage for the buyer that wraps around the old one.
Log in to followI've been going back and forth on this for a week and I can't land on it. The wrap I keep looking at as a model: seller owes on a loan around 4 percent, sells at a higher price, c…
Working through a wrap on a small three unit and I keep landing on two versions of the same deal. Version A: sale at 340k, 10k down, wrap balance 330k at 8 percent. Underlying is…
A note holder I'd been talking to for a year had a wrap he wanted cash out of, and I didn't want the whole thing. So I bought a partial, and what I bought was the spread, not the…
Reading through this room, the thing that shows up in every failure story is the same. The buyer stops paying and the seller still owes the underlying lender, on time, every month…
Short version of a wrap in case anyone else is where I was two months ago. A wrap is where the seller keeps her existing mortgage in place and writes me a new, bigger loan on top…
I'm looking at a wrap as the buyer, and the construction habit is making me ask the wrong-sounding questions. If the seller's mortgage stays in place, whose name is on the deed af…
Not doing a deal. Somebody in a local group shared an anonymized wrap note and deed of trust package as a teaching example and I've been going through it clause by clause, which i…
Run a small management shop, four people, about 190 doors mostly small multifamily. One of my longer-standing owners just sold a 6-unit on a wrap and asked whether I'll handle the…
Trying to price out the closing side before I bring a wrap idea to a seller I know. Assume a 300k sale, 240k underlying at around 4, wrap note in the 270k range at 7. What I want…
I'm preparing rather than doing, and the piece I keep circling is who touches the money. In a wrap the buyer pays me, I pay the underlying lender, and I keep the difference. That'…
Working through a structure before I commit to it. Underlying is a 30-year fixed at 3.75 with about 312k left and roughly 26 years to run, payment 1,640 plus escrow. Plan is to se…
Closed this in early 2023 and it's finally running the way it was drawn, so here's what actually happened. The land: 60 acres, mixed timber and pasture, two miles off a state rout…
Ran the numbers on a deal in front of me and the headline spread is misleading. Underlying: 218k remaining at 3.9, roughly 22 years left, payment 1,430 plus escrow. Proposed wrap:…
Been doing quick turns, 60 to 90 days, buy with hard money at 11.5% and two points, out. Never held anything. Somebody brought me a seller who won't take cash and I don't know how…
Reading through the due-on-sale part and I don't understand the risk math. The seller's mortgage says the lender can demand full payment if the property transfers. In a wrap the p…
I've got capital sitting and I've been reading about seller financing generally. Wraps came up and I don't follow the source of the return. As I understand it the seller keeps the…
Trying to figure out where I fit in this business and wraps keep coming up in every conversation I have, so I read the chapter twice and then read a sample note. Here's the piece…
I've been running wrap math on a duplex I own with a 3.9 percent loan on it, about 141k left. If I sold at 215k with 15k down and carried the 200k at 7 percent, the buyer's paymen…
Seller owes 118,000 at 3.25 percent on a 1960s ranch that needs about 60,000 of work. She'll wrap at 6.5 percent on a 245,000 price with 25,000 down, 30-year amortization, balloon…
My first closing ended up being the structure I told myself I'd never start with, after six months of reading. Writing it out because most of what I read about wraps skipped the m…