Moore and Beau break down three ways to buy real estate without traditional financing: subject-to deals where you assume existing debt, wraparound mortgages that layer a new loan over an old one, and taking over existing liens on properties.
If we're doing sub-2s or wraps or existing lien takeovers. Moore, really quick, do you want to quickly give a quick lesson or a quick explanation on subject-to, wrap, and existing takeovers? What those are? I know you've been taking all the classes.
I have been taking all the classes, but I don't have the full definition to explain.
No worries. So subject-to is where essentially we're taking over their mortgage and then wraps are— hang on, Beau, what's a wrap?
Subject to.
So, okay, then you, then you say it.
So a subject, subject to, you're, it's not taking over. The loan is going to remain in the borrower's name. You're going to take over payments, but it's not an assumption of loan. It generally, the biggest concern, which generally doesn't happen, is the due-on-sale clause. But as long as the bank is getting paid, they mostly don't care who's paying the loan.
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