Epic Real Estate Investing - Wraparound Mortgage | Creative Real Estate Investing for Beginners | 1036

Episode Date: June 1, 2020

A wraparound mortgage (also known as wraps or all inclusive trust deeds) is one of the BEST ways to grow your property portfolio and get no money down income property FAST! Therefore, in today’s episode, Matt explains how you can use this strategy in your creative real estate investing so YOU can grow your financial freedom 10 TIMES FASTER and ultimately RETIRE EARLY! Tune in and find out more!   Learn more about your ad choices. Visit megaphone.fm/adchoices

You don't have a money problem, but rather an idea problem. You see, you don't need a lot of money to invest in real estate. You just need some creative ideas. Boom! And in the world of the epic real estate investor, we call these creative ideas terms. Terms like equity sharing, options, lease options, agreement for deed, sell of carryback, subject to, RAPS, All Inclusive Trust Deed, and so much more. Right now, though, I'm going to show you a rap and how it works.

Wrap is short for wrap around mortgage. Some states refer to it as the all-inclusive trust deed. Doesn't sound terribly exciting, I know. But with the amount of no money down income property you can buy using wraps, it's pretty slick. Your financial freedom, not to mention your overall wealth, can grow 10 times faster. I did say 10 times faster.

Then all of those people going to work every day, making sacrifices, saving their money and things like a 401k, and having to wait 30 to 40 years before they can even begin to enjoy it. Can you believe that's the plan we've all been told to follow? Life is short. You've got options, much faster options, and wraps can be an instrumental part

of picking up the pace and retiring early. This is Terio Media. Success in real estate has nothing to do with shiny objects. It has everything to do with mastering the basics. The three pillars of real estate investing. Attract, convert, exit. Matt Terrio has been helping real estate investors do just that for more than a decade now. If you want to make money in real estate, keep listening.

If you want it faster, visit r-e-I-Ase.com. Here's Matt. The term rap or wraparound of mortgage, those are used interchangeably and pretty loosely at that. Most of the time when someone mentions a rap, they're talking about an all-inclusive mortgage or all-inclusive trust deed, an AITD. It depends on which state you live in as to which one you'd use, but they're both pretty much the same thing. A rap. It's a type of junior loan, which wraps or includes the current note due on the property. Typically, we begin with a subject to deal, what we discussed in the last lesson,

and then add to it a seller carryback mortgage, what we discussed two lessons ago. It's called a rap because we're taking the newly created seller carryback mortgage and wrapping it around the seller's existing mortgage. mortgage to form one single mortgage or an all-inclusive mortgage. It looks like this. We'll take this house valued at $300,000 and the motivated seller has accepted your offer of $250,000. The seller has an underlying mortgage on the property of $175,000 at 6% interest. And you don't have the money to pay that off. So, you suggest to the seller that you'll take over the payments of that mortgage and then pay the difference in the form of a second seller financed mortgage.

The seller agrees and carries back that second mortgage in the amount of $75,000 at 8% interest. The existing mortgage payment is $1,049 and the seller carryback mortgage payment is $550. You'll wrap that second mortgage around the first to form an all-inclusive mortgage or an all-inclusive trust deed. Like I said, depending on what state you live in. You then make a combined payment of the two, a $1599. $1,049 goes to the existing mortgage, and $550 goes to the seller.

But wait, there's more to wraps. We've only cracked the surface. The rap is key in getting control of more property. The name of the game, control. Creative financing like this, this is the tactic. And by wrapping a new mortgage around an existing mortgage with a lower interest rate, you can often save money too. Due to the blended nature of the new interest rate created by the combination of the two mortgages.

You have a 6% interest rate on the first loan, and an 8% interest rate on the second. And at first glance, you might think you're getting a combined interest rate of 7%. But that's not the case. Due to the amount of each individual loan, the actual blended rate will be closer to the lower rate than the higher one because of the larger amount

in the original loan. Another benefit of using RAPS is that they offer more flexibility and allow you to negotiate many more terms than you could than by just taking over the property subject to and paying boring old cash for the difference. Why pay with your cash when you can pay with terms? These negotiable terms include but aren't limited to the payment amount, interest rate, maturity date, equity sharing, moratorium, deferments.

I mean, every single ingredient in the whole enchilada is 100% negotiable. You're only limited by your own creativity. For a complete list of these ingredients, these negotiable creative terms, you can grab a copy of the same cheat sheets that I give to my private RIA's clients. You can get those at epic breakthrough.com. the next lesson. I'm going to show you how to present these creative offers to a seller so that they don't feel like you're trying to scam them. And they'll be more inclined this way to consider and accept your offer of where you'll both end up in a much better position having created a win-win

solution for you both. That's always the best out. And then I'll show you how to find these types of creative deals so you can use more of your new creative ideas than your actual money to build your real estate portfolio and your overall wealth. So click the subscribe button right now because you won't want to miss that and many more of these ideas to come. And who do you know that also may be interested in creative real estate investing like this? When that person comes to mind, please share this with them. See you next to me. Yeah, yeah, we got the cash flow.

Huh? Yeah, yeah, we got the cash flow. Yeah, yeah, we got the cash flow. You didn't know home for them, we got the cash flow. This podcast is a part of the C-suite radio network. For more top business podcasts, visit c-sweetradio.com