What Are 'Wraparound Transactions' And 'wraparound Mortgages'?
I have read about this technique (Wraparounds) on another site posted by William Bronchick, and I have a few questions or maybe doubts about this. I dont know who would want pay approx. 10% more of the appraised value of the property like he suggests getting from a buyer.
Can someone enlighten me about this topic or point me somwhere I can read more about this? It sounds interesting, but yet confusing..... 
Any help or advice would be most welcome!! 
A wraparound is most often used as a land contract. The buyer makes installments that are used by the seller to pay of underlying mortgages. You can demand a higher price for the home because you are giving favorable terms. Hopefully within a few years the house will appreciate and appraise for the price needed to "refinance" your agreement.
The idea is this:
Say you take a prop sub2 or because you have good credit you get a conventional loan at a good interest rate.
then, you offer the property as a "no qualifying" seller financed note (you are the lender) You charge a higher interest rate and a higher sale price because you as the lender (not requiring all the b/s that is involved with bank financing) can.
Most of your buyers are not "A" paper (what banks prefere)they are "b" and "c". paper. These people are used to having to PAY more say 10% of a sale price(as you post states) because over time (30 years) if you think about it, it only adds up to, for examle 10000 more on a sale price, to only @100 dollars more on a payment.
What you offer(higher interest, higher amount financed) "wraps" around what you have(lower interest, lower amount financed and hopefuly much shorter term) So therefore you would profit the difference!!!!
if you have a LSC (loan servicing center) handle the payments they will send you a check for the difference.
That is the concept what i dont know is this: If anyone could add to this i would like to know.....
Does a "wrap" get filed at the court house as a mortgage showing one lein? how does that work? What would show up in a title search??
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B.G. & Wheeler D. LLc Inc.
(A division of: Half Vast Enterprises)[ Edited by WheelerDealer on Date 12/16/2003 ]