Land Contract\Wrap or Contract of Sale? for the pros here. - Posted by Dannyp

Posted by TomC (Md) on January 17, 2000 at 14:48:15:

My personal opinions:

I would rather buy my home on a wrap/subject to deal. Again, this is because the property gets deeded to me at closing. Purchasing on a land contract is slightly more risky, since the property stays in the owner’s name.

In either case, if I were the buyer, I would want my payments to be made through a 3rd-party agent (loan servicing company), so that the seller didn’t have the opportunity to pocket the payment without paying the mortgage!

TomC

Land Contract\Wrap or Contract of Sale? for the pros here. - Posted by Dannyp

Posted by Dannyp on January 16, 2000 at 13:36:25:

I’d like to know which is better and if the following is correct;
Contract of Sale for investment properties. If
you are buying your personal residence, the wrap around is preferable. Reason - on a contract you can get
the person out of the property in 30 days. On a wrap around you have to go through the foreclosure process
in your state. Functionally, both are the same vehicles for creative financing.
Thanks for your input,
Danny

Re: Land Contract\Wrap or Contract of Sale? for the pros here. - Posted by Dannyp

Posted by Dannyp on January 16, 2000 at 21:00:59:

I understand what your saying TomC thank you for your input, I am looking for the best one to use for investing and Why.

Re: Land Contract\Wrap or Contract of Sale? for the pros here. - Posted by TomC (Md)

Posted by TomC (Md) on January 16, 2000 at 18:47:13:

How about yes and no?

Yes, if I were a buyer, I would prefer to purchase a “wrapped” mortgage. The reason is that the house gets deeded to me at closing.

In a land contract, the seller retains the deed until the last installment/payment is made.

No, the statement about foreclosing/evicting is not totally correct. True, in a wrap situation, you must foreclose to get the buyer out of the house for non-payment.

In a land contract (depending on your state), you may have to foreclose too, since the buyer can (rightfully) claim an “equitable interest” in the property.

They are both creative financing techniques, but are of different flavors.

TomC