Wrap Financing

The time of creative house financing is upon us. With the major shake out of the zero down, stated-income loan debacle will come the need to sell property the creative way. Are there still many buyers out there who want to buy homes? Yet, 100% financing is gone and homes will sit if market forces don't change to allow the sales to happen. The last wrap I participated in was in 1999. It was on a very ugly, old and quite un-finance-able fourplex in San Jose. The seller wrapped the note for 100% of the purchase price and kept the underlying financing in place. I paid the seller monthly and he paid his lender monthly. After a couple years, when rents rose, I refinanced the property and the seller went away happy (and unencumbered). This creativity goes away in hot markets where every buyer has cash, financing and motivation to buy, buy, buy. By the way, I don't suggest this method of operation, it's not typically allowed by lenders. Peace!