financing secrets of a millionaire real estate investor.pdf

132 FINANCING SECRETS OF A MILLIONAIRE REAL ESTATE INVESTOR
Loan Term Differential Means More Profit!
An additional point worth noting here is that the
existing $72,000 loan was figured at $479.02 per
month based on the assumption that the loan was
originated at $70,000. In other words, the original
loan balance may have been more, meaning, of
course, that the monthly payment may be more.
However, if the existing first mortgage loan was
paid for 8 years, the remaining balance is just 22
years. If the wraparound loan is amortized over 30
years, the seller has a very bright future at the end!
Mirror Wraparound
A slight variation to the subject-to purchase is the mirror wraparound.
A mirror wrap is commonly done where the seller has little
or no equity but is not willing to simply hand over a deed to the buyer.
So, for example, if the seller owed $97,000 on a $100,000 house at 7
percent interest amortized over 30 years, the wrap would be for
$97,000 at 7 percent interest. At any given time, the buyer’s payoff
will be exactly the same as the payoff amount on the underlying loan.
In fact, the paperwork on a mirror wrap is often prepared by attaching
a copy of the underlying note to the wraparound contract. The
wording is usually something like the following:
Purchaser agrees to pay Seller as the full purchase price
for the Property the sum of $97,000, a sum equal to the balance
of a certain promissory note (hereinafter “Note”)
executed by the Sellers on September 23, 2002, to ABC
Mortgage Company, a copy of which is annexed hereto as
exhibit “A,” the terms of which are incorporated herein.
Beginning on March 1, 2003, and continuing on the 1st day