Should I do a wrap?

I have an investment property that I purchased 1 year ago in Georgia. I have now had two tenants that have come and gone and am thinking of another course for the home. When I purchased the home it was appraised for $124,000 and I paid $92,000 for it. In today’s market, I don’t even know if it would be worth the appraisal price from a year ago.

Regardless, I was looking at different routes and thought a wrap might be a good way to go. If I could sell the house for $115,000 and get 5% down for $7,500 and then finance the rest at 9 or 10% with possibly a balloon after 5 years I thought I might be better off.

I currently have a mortgage at 6.750% on $92,000 for a payment of $596.00 a month. At 9% on $107,500 that would be $865.00 a month plus $7,500 in my pocket. Does this seem like a good idea or is there a better way to go about this? Also, should I escrow the taxes and insurance or is it better to leave that alone. Sorry for all the questions, just trying to learn and make good decisions. Thanks for any assistance!!!

Good to meet you

On your wrap inflate the sales price 6% per year on your call. So a 36 balloon is an 18% increase. Require a minimum of 5% -10% down. Add 1.25% to your existing mortgage interest rate. Set a few payments in a savings account along with John’s U-Haul money and do your thing…

You may consider a Contract for Deed or Land Contract… However I think the wrap is nice.

Good luck



It is nice to meet you as well. Thank you for replying and thank you for the advice.

In this case, if I chose to go with a wrap, should I actually call the mortgage company who is holding my note and “okay” it with them or should I just do a wraparound and see if they call the note?

Michael Quarles,
Would you expand on your post? I don’t know what a “36 balloon” is, and maybe some other readers don’t either.

Could you spell it out for us in a little chart or something? We are grateful for your knowledge in this specialty.

Thanks, Furnishedowner


Michael, please correct me if I am wrong on this…

A “36 balloon” is a three year balloon payment. This means after three years, the full amount of money would be due on the note from the buyer of the property plus the 18% increase of sales price.


Sales price of $100,000
1 Year and 1 day Sales Price of $106,000 (6% increase)
2 Year and 1 day Sales Price of $112,000 (12% increase)
3 Year and 1 day Sales Price of $118,000 (18% increase)

This increases my ROI every year the buyer decides to keep the original mortgage in my name yet puts the pressure on him/her to refinance into their name and pay me off. In reality, if the buyer cannot make the balloon payment at the end of the 36 month term then I as the original mortgage holder (lender to buyer) have the full right to “foreclose” on the buyer since they did not keep up with their end of the contract.

Hello again

I think you have something there… However you probably wont have to foreclosure…

Happy house hunting


would u tell a hit man how to off u? the odds are high that they will not call a note due if it’s performing so make sure the pmnts are made and on time. heck, banks aren’t calling notes due on defaulting notes much right now!