All Forum Posts by: Ryan Nguyen

After leaving a real estate workshop "No Money, No Bank, No Credit" They mentioned this idea called Wrap around.

If people do not know , this is basically you as the seller, giving the buyer the ownership of the house an option to purchase an asset , if they cannot qualify for a conventional loan. (Due to low credit, high interest rates or down payments) This is similar to "sub to" contracts where buyer has ownership and seller has promissory note.

Now in this situation, you are acting similar to a bank. So I've thought of a scenario and When I had asked this question, They said it was possible. Can you apply for an FHA loan, and then use creative financing for Wrap around mortgage? I asked if the "owner occupancy" applies and it was stated otherwise. So this bottled my mind, and why not consider this technique? You can use this to get extra cash, and also maybe a little extra cash flow.

Example: Me: Apply for an FHA Loan and get approved at 3.5% down and 3.5% interest.

Property: 200,000
Down Payment: 7,500
Interest: 7,500
30 Year Mortgage.
Mortgage: 575/Monthly
(Not including insurance or HOA)

Lets just say you want to use this "Wrap Mortgage" technique

You find a buyer that is willing to purchase this property for 230,000 and you require a downpayment at 10% and interest at 7%. Good deal right since the buyer would be motivated for this deal because most conventional lenders require 20% and higher interest rates. Win Win situation?

Buyer:
Property: 230,000
Down Payment: 23,000
Interest: 17,250
30 Year Mortgage
Mortgage: 686
(Not including insurance or HOA)

SPREAD:
Income from sale: 23,000-7,500= 12,500
Interest: 17,250-7500=9750
Mortgage: 111 Cash Flow

The only reason why I don't this working is if the bank submits note due, which then you can convince buyer to refinance.

Have I wasted thought on this or can this actually work, am I getting way ahead of myself?? Considering FHA loans are for owner occupancy.

questions concerning your book @brandon turner

I am looking at the loan amount being paid off and i notice i only goes down about 1,500. But I am assuming you paid more off considering the monthly payments is 2,400. Shouldn't the loan amount be smaller?

Thank you all for the feedback, I am starting out by reading all the wholesaling forums. You guys have motivated me to keep my head up and keep trying. Much appreciated.

Joshua Dorkin and Brandon Turner, Thank you for replying to my post timely and quickly. I can already feel the support, and I had those thoughts in my mind about what you mention about its their scheme to scare off the investors and doing something else with it.. That does free up the market for us. I actually began reading a lot of books. Rich Dad Poor Dad , Real Estate "tax advantages". Tax secrets of Real Estate rich. Clever way to invest into real estate. ETC , I actually just downloaded Brandon Turners 7 years, 7 figures deal and maybe that will also show me some foundations. The ultimate question is which book was the "turning point" when the light bulb flashed? Or am I just over thinking things and scared my self to get involved? However I just started to attend local real estate seminars. Thank you again for replying.

Many "Guru's" will say real estate will be dead by all the big/private firms buying into the real estate market , eventually flooding it where they hold all the inventory and control the market. Many topics are discussed on Wall Street and articles online. This does discourage me as a young an aspiring real estate student. What is some helpful advice to banish these thoughts?

It does make sense what they point out. How everyone hops on the bandwagon. How everyone catches on and then suddenly real estate becomes a trend.

Most of the books I read seem to have transactions happening in the early 2000's . BEFORE the bubble crash.

Is there any important information I need to know that is "up to date" that will assist me on my venture?