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Rainmaker
1,466,027
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Brian Burkhalter Wraps were done a lot years ago when there were mortages that were assumable. A Wrap without lender permission today would probably trigger the due on sale clause.

May 31, 2017 10:43 AM
Rainmaker
914,708
Annette Lawrence , Palm Harbor, FL 727-420-4041
ReMax Realtec Group - Palm Harbor, FL
Making FLORIDA Real Estate EZ

Wow! That was a long long time ago, when horses roamed the prairie and the antelope played.

Today, a wraparound is only possible ONLY when private financing is involved. The benefit is one can acquire real estate and create a profit on resale, or leverage some form of equity associated with that property.

Public lenders who grant mortgages to occupant buyers always include a 'Due on Sale' clause. That means the mortgage must be paid in full before property can be retitled. Those who are 'feeling lucky today' believe there are ways to circumvent the clause....such ideas often lead to the unaware paying a very high price.

Since the Bank of America caused collapse, I have not been involved in a wraparound.

May 31, 2017 10:58 AM
Rainer
86,514
Mike Kelly,CRS,CIPS
The MJKelly Team - Santa Rosa, CA
"One of Sonoma County's Natural Resources"

A "wrap" or All Inclusive Deed of Trust (AITD) was used primarily by investors when we had the Wellenkamp decision which allowed taking a mortgage "Subject to" or just assuming the note. It was NOT a formal assumption so it made it a lot easier. It worked in a high interest rate market very well. With rates in the 12-15% range! You could make money on the "spread". Say the underlying note was at 7% (fabulous in those days!) with a balance of $100,000.  You "wrapped" it at  12% (usually under prevailing rates at the time) so your payment was based on the new note of 12%. So you made in reality 5% on the wrapped amount but 12% on the balance. It let folks into homes because of the super high rates and investor's got it, liked it and used it!

  In light of today's super tight lending practices be careful. FHA is the last of the "subject to" loans. Wrapping private money is another matter. Just be careful as you have to make sure the underlying or "wrapped" mortgage is being paid!

May 31, 2017 11:13 AM
Rainmaker
1,045,215
Dave Martin (703) 585-4687
Fairfax Realty - Fairfax, VA
Making Realty Dreams a Reality #WeWillGetYouHome

Yes but these are more typical of buyers who lack the financial ability to buy since our interest rates are currently still low... as they rise its likely these may be happening more often

Jun 05, 2018 12:31 PM
Rainmaker
3,070,784
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

I have not

May 31, 2017 11:11 AM
Rainmaker
5,579,343
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

in 39 years, I've not every dealt with a transaction that required a wraparound mortgage....

May 31, 2017 11:09 AM
Rainmaker
4,301,969
Richard Weeks
Dallas, TX
REALTOR®, Broker

I have not.  Careful the lender does not call the note.

May 31, 2017 11:07 AM
Rainmaker
5,767,421
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Brian,

I agree with Michael Setunsky 

May 31, 2017 10:52 AM
Rainmaker
2,008,327
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

no - that was popular in the past but I don't see them now 

Jun 01, 2017 03:31 AM
Rainmaker
1,231,605
Mary Yonkers
Alan Kells School of Real Estate/Howard Hanna Real Estate - Erie, PA
Erie/PA Real Estate Instructor

See Michael Setunsky answer.

May 31, 2017 06:45 PM
Ambassador
2,604,833
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

 Way back when. 

    Today you risk triggering the due on sale clause.  Use an Attorney!

May 31, 2017 03:36 PM
Rainmaker
1,708,235
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

Never and never will.

May 31, 2017 03:05 PM
Rainmaker
2,100,602
Anthony Acosta - ALLATLANTACONDOS.COM
Harry Norman, REALTORS® - Atlanta, GA
Associate Broker

I have not.

May 31, 2017 02:28 PM
Rainmaker
1,178,943
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

 Must be Utah school students studying antiquated topics.  The materials have not been updated for at least 20 years.......

May 31, 2017 01:29 PM
Ambassador
5,699,979
Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

I have not, but I know others who have a long time ago.

May 31, 2017 12:54 PM
Ambassador
3,145,821
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

Lots of good explanations here.  I have never been involved with a wrap. I have nothing to add that has not already been discussed.

May 31, 2017 12:02 PM
Rainmaker
1,759,539
Lyn Sims
Schaumburg, IL
Real Estate Agent Retired

Brian, you ask too many questions. How about we ask you one?

May 31, 2017 11:59 AM
Rainmaker
5,265,752
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

No I have not, nor any clients.

Jun 02, 2017 11:03 AM
Rainmaker
4,279,023
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Never have, no even sure if they still have them

 

Jun 01, 2017 06:22 PM
Rainmaker
1,425,100
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

Nope.

Jun 01, 2017 11:03 AM
Rainmaker
1,667,426
Sandy Padula and Norm Padula, JD, GRI
HomeSmart Realty West - Carlsbad, CA
Presence, Persistence & Perseverance

Not any longer. Years ago; yes.

Jun 01, 2017 07:34 AM
Rainmaker
4,799,701
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

I have not.

Jun 01, 2017 05:38 AM
Rainmaker
598,824
Nathan Gesner
American West Realty and Management - Cody, WY
Broker / Property Manager

I have not and they may not even be allowed in your area.

Jun 01, 2017 05:34 AM
Rainmaker
4,434,139
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

I have not.

Jun 01, 2017 03:48 AM
Ambassador
4,316,065
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Brian Burkhalter - not yet!

May 31, 2017 11:04 PM
Rainer
258,949
Mick Michaud
Distinctly Texas Lifestyle Properties, LLC Office:682/498-3107 - Granbury, TX
Your Texas Lifestyle is Here!

I've done sub2's but not carried the wrap.  Too risky now days.

May 31, 2017 10:58 PM
Rainmaker
3,986,000
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

It has been years.

May 31, 2017 07:39 PM
Ambassador
3,986,960
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

Years ago we used this as a way to sell homes because interest rates were so high. It saved the buyer money over the current interest rates and helped the seller sell a home. The due on sale clauses in today's mortgages prohibit this and with low interest rates it isn't practical to even consider.

May 31, 2017 01:55 PM
Rainmaker
2,684,052
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Its a Real Estate tool wielded by those who know how

May 31, 2017 12:15 PM
Rainmaker
808,903
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

Nope.  -Kasey

May 31, 2017 11:47 AM
Rainmaker
6,967,443
Roy Kelley
Retired - Gaithersburg, MD

Yes. It can be helpful with financing a home purchase.

May 31, 2017 11:26 AM
Rainmaker
1,048,887
Doug Dawes
Keller Williams Realty Evolution - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

I have not had the opportunity to do so

May 31, 2017 11:24 AM