Wraps ... what are they ???

[LearningMan]

Hi everyone ... I am a begginer with WRAPS.

Don't know what they are or where to find information. I have searched the forums but have not found any articles.

Can someone please point me in the right direction and offer suggestions on where to start ?

Clearly I need to understand them as I work my way to financial independance.

Many thanks !

 

[Aceyducey]

Hi Learning Man,

Wraps, or wraparound mortgages, are a process whereby YOU become the bank for an end buyer who cannot gain reasonable-cost finance from a standard financial institution.

You make your profit by bumping the cost of the property & charging slightly more than the bank is charging you for the loan.

So if you are helping a person buy a $100K property, you may charge the person $120K. They pay you a deposit of 10% which covers your initial costs in the deal (and gives you a small profit perhaps).

You then borrow money from a bank at say 7% then charge the person 8.5% interest for the same term.

Done right wraps are excellent tools for helping people who are otherwise unable to get finance to purchase a home.

Used inappropriately - well you may have seen the ACA stories

BTW: I just did a search on the forum for wraps and came up with 355 threads. Try http://www.somersoft.com/forums/sea...d=221234&sortby=lastpost&sortorder=descending

Cheers,

Aceyducey

 

[liverpoolharryk]

Good info Acey. You could also look at Steve Mcknights site he is big into wrapping here in Australia. propertyinvesting.com. I am sure I saw info about wrapping on his site.

Jarrod
Jarrod Lane Real Estate

 

[michaelg]

Hi,

Not exactly sure where your surfing but here's list of places you can find more info.

Here..Somersoft.com.au

www.propertyinvesting.com (Steve Mcknights forum)

www.webuyhouses.com.au (Rick Otton's site)


http://mastermindforum.com/phorum/list.php?f=2 (John Burley's forum)

www.financewraps.asn.au (The Vendor Finance Association's website - member fee based)

Regards
Michael Gruber