Lenders who allow wraps?

[Ram Gonzales]

Anyone know of any DSCR lenders that are wrap-friendly? I know that almost every lender has a due on sale clause but are there any who look the other way as long as payments are made? I'm interested in creating more notes this way - buy all cash, rehab, refi-cash-out, and wrap. Alternatively, anyone know of any genuine private lenders that are open to this?

[Jay Hinrichs]

Quote from @Jacob Sherman:

What is wrap ? 

thats when you sell a property that has an existing note on it.. You keep the note in play and you do a second .  google All inclusive Deed of Trust state of CA.. that will give you a really good description and if you can find the actual deed of trust to read its a great wrap document ..

in practice   you have a current 100K loan at 8%  you sell by owner and take a 125k note at 9%  the 125k wraps the 100k.. you continue to pay on the 100k the while the new owner is paying on the 125k  payment lets say on the 100k are 1k a month the new payment is 1.2k a month you make the 200.00 delta.. Also if they default on the wrap its easier to unwind and gives you more control.. either way though your on the hook for the 100k.. and if they dont pay you still have to pay on the 100k while you foreclose on your wrap note..
My Dad started a company in the late 70s called California wrap thats right when the AITD came out.. this was all land though. But a lot of it.. :)