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Can someone please explain how to properly structure a wrap or seller finance deal? I’m sure there are many nuances involved.
If the property is free and clear I imagine the process is pretty straight forward: you agree to a price, agree to terms, record the contract and transfer deed into your name. (Correct me if I’m wrong)
When there is an existing mortgage or liens in place that’s where I really get lost. Say your seller has a $100,000 mortgage lien on the property, PITI payments are $1,490, and there are 10 years of payments left on their note. Assuming you could rent the property for $1,800/month, how do you structure a wrap or seller finance around the mortgage.
Is it possible to offer the seller $1,000/month for 20 years at 0% interest and state in your contract that the money shall first be applied to any superior liens? Therefore you would essentially not owe them anything for 10 years and the following 10 years you would pay them $1,000/month.
How flexible can you get with your arrangements?
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