Buy subto sell via wrap question

[Marcus Griffin]

Im closing on my 1st subto deal at $300K(240k mortgage balance, $60k Partial claim balance) Seller interest rate is 3.4% payment is $1900. I'm looking to wrap this to a end buyer for $350k at 9% interest 10% down. Should my wrap loan be for 30 years or should I include a balloon. Rent is $2200 in area. My 1st deal ever. Looking for experienced investor input.

[Chris Seveney]

Quote from @Don Konipol:

Quote from @Chris Seveney:

Quote from @Marcus Griffin:

Im closing on my 1st subto deal at $300K(240k mortgage balance, $60k Partial claim balance) Seller interest rate is 3.4% payment is $1900. I'm looking to wrap this to a end buyer for $350k at 9% interest 10% down. Should my wrap loan be for 30 years or should I include a balloon. Rent is $2200 in area. My 1st deal ever. Looking for experienced investor input.

 While this is the new rage. I highly recommend you do a good job underwriting the loan and who you are selling it too. Here is an example of what can go wrong.

Chris, this is no different than buying a property , renting it out, and having a tenant who pay late every month.  If you have no “reserve” capital, it can be nerve racking.  With a proper amount kept in reserves, it’s just annoying.
The above poster has implied he has received 24 months payments, only they’ve been late.  So what?  Just add the late fee to the principal balance owed if the borrower ignores paying it.  If the sale with wrap was a good risk/reward investment it will be profitable, dispite any “bumps” along the way.  If the risk was too high visa vi the return, or if the investor was not in a position to accept the risks, then it could turn into a real nightmare.  Then the investment should NOT have been made.  Bottom line - it’s like any other investment.  You want safe buy treasury bills.  Do people believe they are going to get a return of 18% ROI without risk, work, and problems? 

 I do not disagree - I think people have this FOMO and think that because this can be done that there is no risk and they are all trained light slaughtered cattle that it can be done without any money or risk.