EP93: Breaking Down the Details on Wraps

In this episode, we're going to dive into the topic of mortgage note wraps.

For those who are not familiar, a mortgage note wrap, also known as a wraparound mortgage, is a type of financing where an existing mortgage is combined with a new mortgage to create a new loan. The new mortgage "wraps" around the existing mortgage, and the borrower makes payments to the new lender, who then pays the original lender.

During this episode, we'll explore how mortgage note wraps work, the advantages and risks associated with them, as well as the legal and practical aspects of investing in them. We'll emphasize the importance of performing due diligence on the property and buyer before investing and understanding the legal and regulatory requirements.

We'll also discuss the best situations for a mortgage note wrap and break down the concept in simple terms to make it easier to understand. It's important to note that while mortgage note wraps can be advantageous for buyers who can't qualify for a new loan or sellers who want to sell their property quickly, there are risks involved, such as potential default on the underlying mortgage and potential legal complications. We recommend consulting with a real estate attorney before entering into a mortgage note wrap agreement.

This episode provides a detailed and informative overview of mortgage note wraps in real estate investing, making it a must-listen for anyone interested in this type of investment. Whether you're a seasoned investor or just starting out, you'll gain valuable insights into how mortgage note wraps work. So, grab a notebook and pen, and let's dive into the world of mortgage note wraps!


Chapters:
00:00 Introduction
01:00 Recent Bahamas Cruise
04:36 Introduction of Topic on Mortgage Note Wraps
05:30 Explanation of What A Mortgage Note Wrap Is
6:14 Owner Financing and Reselling the House
06:29 Explanation of How to Profit from a Wrap and Selling the Mortgage
07:55 Importance of Using a Title Company or Lawyer When Dealing with Wraps
08:27 Best Situations for a Mortgage Note Wrap
09:04 Paying Off the Underlying Lien
12:20 How a Wrap Note Works in Simple Terms
16:20 Wrap Up


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