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Author Topic: Wrap Around Mortgage After Short Sale  (Read 2542 times)

Offline CHS_360

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Wrap Around Mortgage After Short Sale
« on: August 03, 2007, 06:08:41 pm »
I am currently working a short sale (my first one) where it appears that the lender will take a big enought discount to make wholesaling the deal realistic.  I talked to another investor who happened to call me about the property and said that even if I can get the second shorted, I could probably use a wrap around mortgage to make the terms appeal to a end buyer.

Questions:  How do I structure this deal? Do I use subject to financing on the first and carry the wrap around for a a percentage point or two higher?  What if the first is an ARM?  He mentioned having a hard money guy fund the purchase.  Would I then obtain my own financing and use the wraparound after doing so.  I am extremely confused, yet highly interested in this and would appreciate any help.

I don't want to miss out on this deal and would like to find another reasonable exit strategy aside from wholesaling.  Thanks.

Offline rgchamb

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    • Be Mortgage-free in less than 1/2 the time without refinancing or changing your lifestyle
Re: Wrap Around Mortgage After Short Sale
« Reply #1 on: August 04, 2007, 05:00:43 am »
This will be 2 transactions:

1st b/w you & the bank where the bank has to be paid cash for the SS discount

2nd:  A wrap around mortgage

It sounds like the discount is big enough such that if you are able to get the cash (preferably OPM), you can then put a buyer in the house w/ a wrap around & make $. 

So it sounds like the question is:  Where do you get the $ to pay for the SS?

Offline CHS_360

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Re: Wrap Around Mortgage After Short Sale
« Reply #2 on: August 04, 2007, 03:20:11 pm »
Thanks for the reply.  My original post should have read that the bank will NOT take a big enough discount to allow my to wholesale it.  That is why I thought I could get it paid off at 75-80% of the ARV and use a wraparound loan. 

I have access to a HELOC that will cover the cost of the home.  However, I would like to be able to take that money back out and get another loan on the property.  Is that possible. 

Also what it OPM?   Thanks

Offline Mdhaas

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Re: Wrap Around Mortgage After Short Sale
« Reply #3 on: August 04, 2007, 03:31:52 pm »
Quote
Also what it OPM?

Other Peoples Money

Quote
However, I would like to be able to take that money back out and get another loan on the property.  Is that possible. 

As long as your personal parameters (credit, income, etc.) and property parameters (value, condition, location) are good there should not be any reason why you could not refinance and extract your L.O.C..
If at first you don't succeed.....................skydiving is not for you

 




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