Sub2 Vrs. AITD/Wrap Around Mortgage???

General Real Estate Investing
1

What is the difference between these two??

I am trying to buy a house from a Owner who is considering this for me but he has lots of concerns

Due on Sale-I told him extremely unlikely in todays market as long as payments are being made-He says the Title company will notify the mortgage holder triggering the loan.

If I don’t pay how can he avoid foreclosure and get his property back easily without a protracted legal battle/cost. I though I had read somewhere here about having a pre-signed deed that could be recorded if I was behind that would eliminate foreclosure for him.

We would be using a loan servicing company for both of our protections.

Keep in mind I am not looking to flip this house. I want it for myself and desperately need the tax write-off. I don’t expect to be able to refinance into my name for 3-4 years.

Answering my basic question and any advice would be appreciated.

2

I use wraps myself.

A wrap gives him the right to foreclose if you do not perform based on the agreed terms. When you sell, the trustee on the deed of trust has to provide letter stating loan (wrap) has been satisfied, and if you default, he can still come after you unless you specifically call it in the note.

Never give him presigned deed.

P.S. I answered based on my understanding, but I am by no means an expert of the topic and someone more experienced will provide more information.