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Wraparound Mortgage
Wraparound Mortgage (Wrap Mortgage or Wrap). A form of owner financing whereby the seller of real property extends to the purchaser a junior mortgage which wraps around and exists in addition to the seller's own mortgage. Typically the new purchaser makes monthly payments to the seller, who is responsible for making the monthly payments on the underlying mortgage. If the purchaser then defaults, the seller then can foreclose and take back the property. Because title transfers from seller to purchaser, most wrap mortgage transactions will violate the due-on-sale clause of the seller's mortgage.
Wholesaling
Wholesaling. Traditionally, wholesaling is a system of real estate investing in which a property goes from one investor to another. In a typical wholesale deal, one investor purchases a property with hard money or cash, does minimal rehab work, and then sells the property at a below-market price to another investor, who also pays with hard money or cash. An alternate method for wholesaling involves one investor entering into a contract to purchase a property and then assigning for a fee that contract to another investor. The second investor then purchases the property with hard money or cash. This type of wholesaling ...