Understanding Real Estate Wraps | Wrap Around Mortgages Explained
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Жыл бұрынIt took me years to learn this because no one teaches it… In this training, I talk about a real estate wraps, the difference in a deed and a mortgage, and everything else you need to know to understand wrap around mortgages in your real estate investment business.
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❎ I am not a CPA, attorney, insurance, contractor, lender, or financial advisor. The content in these videos shall not be construed as tax, legal, insurance, construction, engineering, health & safety, electrical, financial advice, or other and may be outdated or inaccurate; it is your responsibility to verify all information yourself. This is a KZfaq video for entertainment purposes ONLY ❎
@WasatchWheeler 8 ай бұрын
When he was talking about Notes I literally thought of Dumb & Dumber when he has the briefcase full of IOU"S on sticky notes and says "That's a car! Might wanna hang onto that one!" hahaha love Pace and the way he explains things
@TheDudisi 11 ай бұрын
Pace I really like your ability to simplify things while adding your sense of humor to it. You make creative financing looks so easy this is great. Thanks man🤙🏽
@louisjoseph4114 Жыл бұрын
This was awesome, some people complicate the term note. It just an agreement to pay, and he simplified it by using a car as an example. Title, deed(ownership) & creating 2 notes is how you tie subto agreement & owner finance(equity) agreement aka hybrid together as a wrap. ✌️
@PaceMorby Жыл бұрын
Thanks Louis!
@PhatLucci 9 ай бұрын
"Hybrid" is a looooong used Mortgage Term. You didn't make it up, you put your twist on it. We were doing various types of "Hybrid Loans" prior to the 2007 crash.
@scientificapproach6578 Жыл бұрын
Looking for this video, perfect timing. This is what I thought a wrap was but was not sure.
@PaceMorby Жыл бұрын
Great to know this was helpful!
@UltimateBargains Жыл бұрын
I use "Mirror Wraps" when taking title subject to one debt that has an Unpaid Principal Balance equal to the purchase price to protect the seller with the wrap junior lien in case of default.
@SP-qi8pw 9 ай бұрын
Can you explain more? That’s interesting.
@johngleue 6 ай бұрын
@@SP-qi8pw A mirror wrap is also known as an exact wrap. There is no markup of the principal amount or the interest rate. In a mirror wrap, the seller doesn't make any monthly profits. It's effectively a passthrough construct that grants rights of foreclosure to the seller in case the buyer defaults.
@Maryjane13400 Жыл бұрын
Thanks for that Texas bit, looked it up& one can do an executory contract but it must be fully executed within 180 days. Apparently to many sellers (owners) scamming buyers (equitable owner) out of their money. Triggering expensive lawsuits. I am Assuming With the possible trigger of a due on sale clause and the 6 month time frame on executory contract issues this sub 2, wrap n other creative deals are a no go in my state. Will search else where. Thanks for the tip.
@PaceMorby Жыл бұрын
You're welcome and thanks for sharing your insight.
@ileanaandersson875 Жыл бұрын
Q: I only property in Arizona, I am renting it out. So there’s a tenant in the property.. I would like to sell the property on a note/I will carry the loan. However, I have a mortgage on the property. Home can I do this?
@cmdv42 Жыл бұрын
💯💯💯
@itsa.k7028 Жыл бұрын
I love the explanation pace now I understand what a wrap is
@PaceMorby Жыл бұрын
That's awesome, AK!
@itsa.k7028 Жыл бұрын
@@PaceMorby love you pace
@mbrown8284 Жыл бұрын
Yes, yes it makes complete sense. The real question should be why separate the notes on acquisition it doesn’t change the fact that there’s still two notes.
@danielletacoronte9394 Жыл бұрын
So, once the wrap is done, what happens to the deed? Is it filed? Mortgage filed? How do they buyer hold title?
@Theawakenedmen Жыл бұрын
so basically its combining 2 or more notes and charging interest?
@joencrypto8133 11 ай бұрын
Is this were use a servicing company to accept the wrap payment, and servicing company take care of the split payment on note 1 and note 2?
@yanceyboi1 6 ай бұрын
Did you get an answer to this question?
@ampthegamergod2223 3 ай бұрын
So im doing a hybrid deal to get my personal living residence. Itll b 6% for the sub2 and 0% for the seller financing. So should i not wrap this for myself? Or pay the notes separately? Can you explain why you dont buy on a wrap
@PaceMorby 3 ай бұрын
Great question - ask this in the free FB group and there'll be a ton of people wanting to help you with this deal paceapproves.com/freefb-ytc
@ruloalej Жыл бұрын
A title company told me that they no longer insures wrap around mortgages due to New Legislation Passed by the 87th Texas Legislature in house bill SB43 effective January 1, 2022, should I contact a different company?
@PaceMorby Жыл бұрын
Yes.
@BuddyLoveDance Жыл бұрын
Wait since when is executory contract not possible in texas?
@Maryjane13400 Жыл бұрын
2005. The waters started getting murky with the whole seller/ title owner & buyer/ equitable owner. Sellers would rope buyers in and then back out aka evict buyer, siting in court that the buyer had a regular lease instead of a lease to own contract. Seller would keep buyers equity and move on to the next victim…. I’m in Texas myself and I’m wondering if doing deal here creative deals over 6 months are worth it.
@jakemaddox76 11 ай бұрын
I'm trying to buy a home now, via my neighbor who wants to "owner finance". So he is buying the townhome I want, we will wrap this and I will be the owner. He's thinking he can use a promissory note from me as proof of income to buy the property, as he has an existing mortgage and his debt/income will not allow for a second mortgage. Is this possible? How does he verify that the lender will allow the mortgage to be wrapped?
@GTXL76 10 ай бұрын
Sooo...no mirror wrap on a VA loan in Texas? 🤔
@markstanley4836 Жыл бұрын
So what is the difference between a wrap and a subject-to? Based on reading the comments, is the only difference that a wrap will include additional interest, while a subject-to is paying the seller their own equity?
@kenziecashflow Жыл бұрын
wrap is Subto but the seller makes a small margin
@johngleue 6 ай бұрын
A wrap is a new mortgage covering an existing mortgage. It's effectively a passthrough construct that grants rights of foreclosure to the seller in case the buyer defaults. Wraps give added protection to the seller.
@I_Am_Adrien Жыл бұрын
Why is it better to have the notes separate versus a wrap?
@RealNiggaKazutoKirigaiTheThird Жыл бұрын
Ok let’s say you have 2 payments right Both payments are 100$ But on 1 payment it has interest let’s say 3% if the notes are separate, you're paying 100 & 103 If the payment is wrapped, you're paying the interest on both payments so instead of 203 you're paying 206 and this can add up with big purchases
@nobuenofumbi Жыл бұрын
@@RealNiggaKazutoKirigaiTheThird thanks for the breakdown
@PaceMorby Жыл бұрын
@Mar Hey Mar! Thanks for chiming in here and answering Adrien's question. Appreciate it.
@vladpawnczar3085 Жыл бұрын
so how do you make money lol this is a in complete video.
@johngleue 6 ай бұрын
You can create a wrap around mortgage to pay the existing mortgage and add additional terms that pay the seller while allowing you to still gain cash flow. We just offered an exact wrap on a property with an additional term of 10k down on the transfer of title and 10k at the end of the first year. The property will cash flow $9600 annually. So the last payment should practically pay for itself. This allowed the seller to get a total equal to 200k on market value, which is what she wanted. Since we helped her cut out the realtor fees and closing costs, we got it for 180k and basically just paid 10k for a cash flowing asset that will pay us back after the second year of renting it out.
@jaceperez9 Жыл бұрын
why would a wrap be used?
@scientificapproach6578 Жыл бұрын
I’n this example, if her husband had a 3% loan but current car loan rates are 6%, why give away a low rate loan. Make the buyer pay 6%. The $200 comes from rate increase and/or price increase.
@PaceMorby Жыл бұрын
I love how you guys are engaging with one another. Thanks for answeing his question bro!
@crm7414 Жыл бұрын
@@scientificapproach6578 But as they buyer, why in the world would I want to do this deal??
@monicabustamante4249 Жыл бұрын
@@crm7414because some people don’t have the “perfect” financial profile to adquiere from the dealer directly.
@JoNethery 3 ай бұрын
This is info is useless. Why you are not saying what agreement should be sign between seller and buyer (who will be paying original mortgage pmt + extras) and whom deed goes once this new agreement is signed? OR is it allowed by the lender OR what happens when buyer stops paying? Is the original seller still responsible for the original loan?? Otherwise what's the point of this video?????
@PaceMorby 3 ай бұрын
Sounds like I need to make a new video on this if people are getting so pressed
@diazalex5314 2 ай бұрын
Unless Pace starts his rapping career, these topics can not be expected in a 7 minute video
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