What is a wrap loan in commercial real estate?

A wrap loan in commercial real estate is a type of financing that combines a traditional mortgage loan with additional financing. This additional financing usually comes from the seller of the property, a third party financing company, or the buyer themselves. In North Carolina, wrap loans are used mainly with properties that are difficult to finance using traditional loan products. They provide buyers with an opportunity to purchase a property without having to obtain multiple loans or put up a large down payment. A wrap loan covers a variety of costs related to the purchase of a commercial property. This includes the mortgage loan, closing costs, and other costs associated with the purchase. The seller is usually responsible for financing these costs. The buyer then pays the seller in monthly installments for the additional financing. This structure allows the buyer to purchase a property with less money up front and spread the costs out over time. Wrap loans are often more expensive than traditional mortgages, so it is important for buyers to carefully consider their options when it comes to financing a commercial property in North Carolina. A wrap loan can be an effective way to get into a commercial property with less money and time, but it is important to be mindful of the costs associated with this type of financing.

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What is a wrap loan in commercial real estate?

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