Creative Finance

Model a subject-to / wrap on your own numbers: buy subject to the existing senior lien, add a seller carry if there is one, and write a wrap note over the stack. See the monthly spread the wrap captures over the financing underneath it, your cash to close, and the cash flow to you as the wrap holder. Educational only.

Subject-to senior lien

Lien balanceWhat is still owed on the existing loan you take subject to — your own figure.Lien rate (annual)The existing loan's annual rate, entered as a whole number of parts per hundred — your own figure, nothing is prefilled.Amortization term (months, optional)Leave blank to treat the lien as interest-only. Enter its remaining months to have the read carry its principal too.

Seller carry (optional)

Carry balanceA note the seller carries behind the senior lien, if any — your own figure. Leave blank if there is none.Carry rate (annual)The seller carry's annual rate, as a whole number of parts per hundred — your own figure. Both balance and rate are needed to count the carry.Amortization term (months, optional)Leave blank to treat the carry as interest-only, or enter its months to carry its principal.

Wrap note over the stack

Wrap note balanceThe face balance of the wrap note you write over the financing underneath — your own figure.Wrap rate (annual)The wrap note's annual rate, as a whole number of parts per hundred — your own figure. The spread comes from this rate sitting above the underlying rates.Amortization term (months, optional)Leave blank to treat the wrap as interest-only, or enter its months to carry its principal into the cash-flow read.Buyer down payment (cash to close)What the end buyer puts down — your cash to close on the structure. Optional; the spread reads without it.

Enter the subject-to lien's balance and rate and the wrap note's balance and rate to see the monthly spread the wrap captures over the financing underneath it. A seller carry and amortization terms are optional.