Real Estate Wrap Around Mortgage Explained

[@jamelgibbs]

What was your biggest take away from this video? Let me know below. Also, don't forget to like and subscribe.

[@777visionquest]

that a wrap around can be used like a subject to......with owner finance......so I am wondering does the payments go directly to the owner or does the attorney set up a system where the payment is sent to some third party who pays everybody....

[@jamelgibbs]

Great question Brenda. I would recommend going through a third party. That way you'll know that the payments are being made. When I mentioned the funds will go to the seller, I meant that its flexible how the payments are made. Ultimately, the seller's mortgage will need to be paid and the difference will go to the seller. Hope that helps!

[@kingedwardthenow]

What company does wraps? I'm having trouble finding one

[@jamelgibbs]

What you mean? Gotta have an atty do it for you.

[@williedavirtualflipper]

Can the seller offer dwon payment assistance where the end buyer has qualify for loan a and puts dwon less of a dwon payment and use his mortgage company to buy the house from the seller. Thanx you for ur time‼️

[@legacywithoutlimits]

Thank you for such a detailed explanation. You dropped several golden nuggets. My biggest takeaways were regarding how you could take a deal where the seller is asking for close to market value and still make it profitable, the fact that you mention rent to own, the breakdown of benefits for the buyer and seller, the fact that the investment is secured by the note (recourse), and the seller has no debt to income ratio issues if they wanted to seek financing for themselves. This was so good. I appreciate you brother. God bless.

[@jamelgibbs]

Thank you.

[@Susan.Beavers]

i have watch several videos about this and your video made it the most clear. thank u!

[@jesham7627]

The document to offset the debt of the seller is a key takeaway. What happens if the seller fails to make payments on the primary mortgage? Can the secondary mortgage holder be notified of each payment and balance of the primary mortgage?

[@casam200]

I was wondering the same thing...

[@jenniferfaggett2389]

Excellent explanation of how this strategy works. Especially by mentioning the document that offsets the debt

[@FlipWithRick]

Good stuff Jamel! I can feel 18 years of experience in this video alone.

[@jamelgibbs]

Thank man.

[@dedrickbellinger7291]

Thank you for breaking this down so simply. Great Content

[@jamelgibbs]

Glad it was helpful!

[@Miricawhip]

Good stuff. Now I know the difference between the subject to and wrap around!!!

[@dan_fow]

valuable content, thank you.

[@Whatever0704]

You can also get the sellers debt of "the books" with a SubTo so the their DTI will not show the loan and they can qualify for a new loan

[@CharlieL.GrayIIREICREIBF-vu6my]

Excellent 👍

[@jamelgibbs]

Thx

[@WilliamWeekesJr]

Learned how wraps work - Thanks

[@jamelgibbs]

That’s great!

[@Chief_Cochise6]

Hey I have a question. Is there a specific name for the document you mentioned in the bonus clip that the seller can get from the title company that will help offset their debt to income ratio?

[@breelonbryant7472]

I understand this concept but I hear you mention "unlike a subject to" when referring to this wrap mortgage. What are you using for acquisition prior to placing a wrap on it? Are you doing subject to then wrapping? Im curious to the acquisition before being able to place a wrap

[@jamelgibbs]

The phrase "subject-to" all by itself indicates taking ownership of a property subject-to it's existing financing (and often subject to other existing liens and debt). You get a deed and you make the borrower's payments. "Wrapping" indicates an additional mortgage executed on the property. (This came directly from Google)

[@rw6935]

You explained it well. My question is how much would you offer to pay the seller monthly? And does the buyer get the deed on both a wrap deal and subject to deal?

[@jamelgibbs]

A lot to explain here, so maybe I'll do a video on it.

[@rw6935]

@@jamelgibbs Ok cool!

[@tibet20111]

Jamel but in both cases your not giving the Seller any cash right?

[@jamelgibbs]

Depends on what you negotiate

[@TheKB10]

What if the seller does not pay the bank because they have the offset letter? How can you ensure the seller will always pay the mortgage?

[@timsmith1033]

does the seller take out the loan to replace the existing loan?or the buyer?

[@healeybomb516]

What is the instrument called that the seller can use to not have to show the mortgage in the wrap so he can qualify for another loan?

[@timothyrhodes9356]

What is the document called that the seller needs to clear their debt on that property?

[@jamelgibbs]

Basically, the seller can claim the credit for the income on a wrap. They will simply show this to the lender. This will offset the mortgage debt. Talk to your attorney about this. Hope that helps!

[@jesham7627]

What are the actual agreements used in wrap around mortgages? Are you able to share these types document(s)?

[@megandill6071]

Good video! How do you get around the alienation/acceleration clause? I want to do this strategy for my current rental but I’m afraid they may call the full loan amount due

[@jamelgibbs]

Great question. You can’t. Honestly though, chances are they will not call it due. It hasn’t happen to me or anyone I know, and I’ve been doing this since 2002. Just did one last week. Hope that helps!

[@healeybomb516]

Bank just wants their money. Keep the payments up and they very likely won't call it due.

[@jhameldjones1637]

Im about to acquire a property using the sub2 method. fresh 30yr VA loan exists at 144k at 3.4% interest, 1018$ a month PITI. My plan is to sell owner financed for around 165k at 4.3%. How would i structure this if i do a 10 or 15 year deal with buyer while i have a 30 year mortgage? how much would they pay monthly? Would i have to pay more than the 1018 monthly to get it paid off sooner?

[@jamelgibbs]

Check out this video: kzbin.info/www/bejne/pnSwi4WFg89gb9U

[@myrealtv7830]

Can this trigger the"due on sale" clause the same as "subject to" ?

[@jamelgibbs]

Yes. But it’s never happened to me. Chances are slim to none.

[@SonOfBeaufort]

But how do you make money as the investor in a Wrap type deal?

[@Susan.Beavers]

thank you!!!!!!

[@Thejasonrogers]

Jamel what if I sell the property and the buyer pays me I then pay the seller that is selling me the property but he does NOT pay the mortgage? How do I make sure he’s going to pay the mortgage since I can’t because the loan is not under my name? Thanks !!

[@jamelgibbs]

When you close the transaction, you should have access to make the payments yourself.

[@charlesguillen9272]

Maybe I missed it but I would have to go to my bank and get another mortgage to wrap the mortgage in place?

[@jamelgibbs]

No. You’ll use the existing loan and create another loan to wrap it via the owner.

[@joethemlo]

Awesome thanks.

[@jamelgibbs]

Thx

[@sxavier77]

Hi, how much is the closing cost for a deal like this, and do I get to deduct the interest and depreciation as the new owner? Thanks.

[@jamelgibbs]

You'll pay normal closing costs as with any closing. Also, since you'll be the new owner of the property you'll get the benefits of the owner.

[@ItsLaShantell]

Is the seller paying the note to the new lien holder who’s wrapping the loan? Or his original lien holder?

[@jamelgibbs]

We use a third party to pay the note.

[@MalcolmBrownson]

WHO holds the Deeds!!

[@jhameldjones1637]

nice name

[@jamelgibbs]

Thx lol. U 2

[@credittrickscredithacks]

How do you wrap a VA loan?

[@jamelgibbs]

If a loan is assumable (like a VA loan) it can be wrapped.