BiggerPockets

When you do a wrap you create a new mortgage that "wraps" the existing one. The loan between you and the original lender stays in place. There is a new loan with you as the lender and the buyer as the borrower. Those payments come to you and then you use them to make the payments on the existing loan.

You probably want to get an attorney to create all the documents.

1) Yes, this could happen. You are transferring title, which violates the DOS clause. Seems rare for this to happen, though.

2) You foreclose and take the house back. Hopefully the buyer would just give it back painlessly, but foreclosure is your final options.

3) There are some other threads on this topic. This is one of the more controversial aspects of this type of deal. Look for "subject to", which is effectively what you're doing.

The buyer may want some assurances that you're making your payments. If you don't the original lender will foreclose on you and take the house. You may want to use a service to handle the payments.

This loan will remain on your credit report and may affect your ability to get other loans.

Many commercial loans are assumable. The lender may have to approve the buyer and there may be some fees. But if this is possible, this is a much cleaner option.

A wrap can be done as an installment sale or contract for deed, where title does not change to the buyer until the terms of the contract have been fulfilled. This defers the recording of deed. This does not remove lender's rights to call the loan due.

Very likely, the loan being wrapped could have a balloon, and at the time the balloon calls the loan, the buyer will need to do something!

The details depend on exactly what's in your note. Generally any sort of subject-to sale (including a wrap), a land contract, contract for deed, an option (e.g., as part of a lease option), or even a lease longer than three years will violate the DOS. Like I wrote before, there are a LOT of threads on the topic of subject to, so you should search and read some of those. Opinions vary quite a bit on this topic, so I really can't give you a simple summary. It does seem insurance is the biggest area of risk. The most conservative solution is just to keep your insurance in place with your lender named and have the buyer buy a second and completely separate policy with you (as the lender) named on that. Others say this is waste of money and unnecessary. Other claim giving the lender explicit notice of what you're doing and if they don't object fairly quickly, then you have a basis to object if they later try to call the note.

Are you sure the existing note is not assumable?

There is not enough information here to make specific suggestions but since this is commercial not residential, you might consider doing a master lease or a lease that allows subleasing. Your "buyer" (now tenant) could profit from his sublessee. After some time, he'd have plenty of history to show a bank to get his own loan. You'd remain in control and be able to take more deductions.