All Forum Posts by: Neil Aggarwal

I am lending.  Are your clients looking for rehab loans or long term loans?

Let us know what you find out.

They are not forcing wraps into loan assumptions.  That is not what I said.

Some title companies are making it policy to not close any wrap transactions. Others will do it only with consent from the underlying lender. None of them with do it without consent.

Your profile picture makes you look quite young. If that is the case, kudos! I don't see many young people thinking about the future.

Your title says investor insights but then your post talks about your primary home.  To me, those are separate.  I do not want to live where I invest and I do not invest where I live. They have different criteria.

Do banks finance construction?  I have never asked but I was under the impression they don't.

Sub-to is where a seller has an existing loan on a house.  They sell that house, typically to an investor, while leaving the existing loan in place.  The buyer (In this case the investor) owns the house "subject-to" making the payments on the loan.

Owner finance is where a seller sells a house to a buyer with financing.  So, as an example, let's say the seller is selling a house for $200k.  They might offer it to a buyer for $20k down and the rest in payments. It is just like any other loan except the lender is the seller.

The two concepts are separate, but can be combined.

An example of a sub2 without owner finance: An investor buys a house sub2, keeps the existing loan in place, and uses the house as a rental.

An example of owner finance without sub2: An investor owns a home outright. They sell it to a new buyer for $20k down and collect the rest in payments.

An example of sub2 with owner finance: An investor buys a house sub2.  Then, they sell it on an owner finance. When they sell it, they keep the underlying sub2 in place doing a wrap loan. The investor collects on their owner finance and pays the underling sub2 loan.

Here a wrap which is not sub2: An investor buys a house with a loan from a lender. The investor sells the house on an owner finance and wraps the underlying loan.  This is not sub2.

The point of this thread is that doing a wrap loan now requires lender consent, so you better understand the lender's position on wraps before you design an investment strategy around it.

None of the places I want to invest.

You are equating rare to never. That is not accurate. There are some lenders that will do it. They are few and far between.