Question:
What exactly is a “wrap” transaction?
-Student
Answer:
A wrap transaction means you’re buying a property that typically has an existing first loan. The seller carries a second loan and you wrap both of them to make one payment. That is a simplistic explanation of a wrap. Wrap around loans are used in many different creative way. Creative financing is a world unto itself. Back in the 80’s it was just about the only way we could get deals done. I suggest if you ever have a chance to listen to Bill Tan, Shawn Watkins or Aaron Mazzrillo, this is exactly what they attempt to do every day.