The wrap around mortgage concept advocated by the author increases the speed of money by assuming the loan from the seller, fixing it up, and then turn-around and sell on contract with very little money down, hence creating a positive cash flow machine. The concept is simple and elegant but I don’t think this is practical any longer with the the “due-on-sale” clause of most mortgage loans these days, thanks to the Fannie Mae and Freddie Mae agencies. On the other hand, with the two agencies near bankruptcy and a potential hyper-inflation with Fed’s money printing machine nowadays, the author’s method may come back in vogue.
Now suppose this method is doable. I wonder about its legal implication and whether there needs to be a legal entity handling the transaction. You never know what people are capable of doing through legal means when they don’t like the house they just bought or the arrangement of the house they just sold. Having lots of houses tied up in such a wrap-around mortgages could spell disasters for legal entanglement.
It’s a novel idea in the 80’s or 90’s but I doubt it’s even practical today.
