Is it a "WRAP" or "Subject To" - Posted by Jim LaVerdi

Posted by David Alexander on December 25, 1999 at 18:53:26:

They arent the same thing.

Taking a property subject to means yous imply take over payments on the existing loans. You dont assume them, or anything you just continue making the payments.

A wrap is a form of the exit. You can sell wrapping the loans you took over payments, you could also sell on a L/O, You could also cash out the loan.

A wrap happens for example you have an uderlying loan of 70k(we’ll assume 700/month on the underlying) and then you sell for a 110k, with say 10k down, you now have a 100k that the payor still owes you. So you wrap the 100k around the 70k, maybe you have 1000/month coming in and 700/month going out, which gives you a positive cash flow of 300/month. It the interest on the underlying is lower than the top loan then you would also have equity growth.

The best to read to understand this is “The Real Estate Money Machine by Wade Cook”

David Alexander

Is it a “WRAP” or “Subject To” - Posted by Jim LaVerdi

Posted by Jim LaVerdi on December 24, 1999 at 22:42:37:

I was just looking at two different (or are they) ways of structuring a deal.

My question is this…Is a Wraparound Mortgage and taking a property “Subject To” one in the same thing? Either way we are paying the seller for both loans “The First” and the “Carryback”. The only difference I can see is that, on a Wrap we pay a flat combined amount principal &interest payment, and on a subject to we pay the seller his interest & principal , and to the bank their principal and interest. Is this correct? It seems like the same thing. Is it?