Looking for sample wrap around mortgage addendum or agreement (used in Texas)

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Anyone in the DFW area buying houses regularly via a wrap around mortgage? I am looking at a potential opportunity (off market response to letter) where the seller would consider financing with his note in place for a 7 month period (seller out of state and wants to be done). I would like to tie up the property before someone else then conduct further due diligence. Based on initial assessment and discussion with seller, I am looking at this as a potential flip (again, need to gather more info). I have not purchased a property in this manner before.

For you Realtors, would the TREC 1 - 4 and Seller Financing Addendum be sufficient to tie up the property in the interim?

Is the existing mortgage assumable? I would talk to an attorney or a title company for the most up to date rules, this is not something that you want to DIY based on Internet advice. 

FWIW though, I think there's either a checkbox on the standard TREC1-4 contract, or a specific TREC addendum for this

@Grant Kemp is a very knowledgeable local investor for creative financing transactions

BTW I think that's a great strategy for flippers assuming it works - instead of paying for hard money, negotiate with the seller to take over their existing financing for the 6 months it takes to finish the project, then pay it off on the resale or refi.

@Dmitri L.

The loan is not assumable. I was looking for the sample to familiarize myself with the terms and to better understand the transaction type. I would definitely use professionals to complete this type of transaction. Right now I am simply trying to tie up the property. I might be able to tie it up with the TREC forms and give myself outs to restructure. I want the seller committed so I work the due diligence.  

FYI, these are a pretty good articles by a Texas attorney on assumptions and wrapping existing mortgages in Texas:



What is the difference between an assumable and a nonassumable loan?

Most all loans today are referred to as nonassumable. This is meant to be contrasted with certain loans in years past that could be assumed merely by paying an assumption fee and notifying the lender of the new owner.

But is the term "nonassumable" accurate? Not really. As stated earlier in this book, the concept of title is separate from the concept of debt. An owner of property is almost always entitled to transfer title whenever and to whomever he or she wishes. Doing so, however, does not relieve the seller from responsibility to pay the note (since the seller signed it), nor does it automatically obligate the buyer to pay it (since the buyer did not sign it). A deed transfers title–that’s all.

The assumability issue is relevant in determining whether or not the lender will allow substitution of one obligor on the note for another. In other words, will the lender let the seller off the hook for the debt and replace him under the note with the borrower? The answer is almost always no. Lenders want the buyer to apply, qualify, pay fees, and get a new loan. That is, after all, their business.

I second lonestarlandlaw.com. I've used him for a few things. He's very knowledgeable, and wrote the book on Texas Real Estate Law for laypeople... Literally, it's on Amazon.

Why not treat this the same as the wholesaling. Tie up the property with a good contract and sell your contract to another flipper. I did a rehab in August this way. PM me if I can help you more. Also, I know a good attorney that is familiar with owner finance and wrap mortgages. 


I am new to BP and curious as to how this deal came out.  Care to share an update of how it worked/didn't work?  

Can anyone share a success story about using this type of structure in the DFW area for rehab and/or flip?  

Anyone have success contracting to give the seller a portion of the equity after the fix?  How did you structure it?