The Smarter Way to Lend in Real Estate
If you’re looking for a smarter way to earn double-digit returns without flipping houses, managing tenants, or risking capital in volatile markets—wrap lending might be the most profitable real estate strategy you’ve never heard of.
While most private lenders focus on being solo lenders to traditional fix-and-flip loans or lending to landlords building rental portfolios there’s a growing community of savvy investors using wrap lending to dramatically increase ROI, reduce risk, and generate consistent passive income backed by real estate.
What Is Wrap Lending?
Wrap lending is a leveraged private lending structure where two lenders team up to fund a short-term real estate investment typically a flip or BRRRR deal. Instead of one lender funding the full amount, the deal is split into two layers:
- Co-Lender: Provides the majority of the capital (usually 70–85%)
- Wrap Lender Originates and services the loan and provides the gap funding (typically 15–30%) at higher terms
The borrower makes one monthly payment to the wrap lender, who then pays the co-lender their agreed-upon portion.
Why Private Lenders Are Loving Wrap Lending
Higher Returns
Most private loans offer 10–12% interest and 1-3 points which works out to 14-16% year depending on the terms. Wrap lending often delivers 25-50% ROI on the same terms to the borrower.
Faster Capital Velocity
Wrap lenders are typically in deals for 6–12 months. That means you can recycle capital multiple times a year and each time collecting points and compounding your profits.
Lower Risk Exposure
You’re not taking on 100% of the risk. The co-lender shares the risk. As the wrap lender, you are using leverage to create amazing returns while providing the lending opportunity, underwriting, origination and servicing.
No Property Management or Construction Stress
Unlike flipping or owning rentals, you don’t manage contractors, tenants, or repairs. Your role is passive but your returns are anything but average. Wrap lenders are typically earning 25-50% ROI depending on structure
Let me tell you something I’ve learned from watching wealthy investors: they move fast and hate red tape. That’s why they love working with wrap lenders. You provide speed and flexibility and in return, you create income, influence, and opportunity.
Example Deal
- Loan to investor: $180,000
- Wrap Lender: $20,000 @ 12% + 3 points
- Co-Lender: $160,00 @ 9%
Wrap Lender Return:
- Loans: $20,000
- Total Return: $6,600
- ROI: 33% (six months)
- Annualized ROI: 66%
Co-Lender Return:
- Contribution: $160,000
- Total Return: $7,200
- ROI: 4.5% (six months)
- Annualized ROI: 9%
This is the power of financial intelligence. Same deal. Two investors. Two different results. One active. One passive. Which one do you want to be?
This is how real wrap lenders are creating reliable, outsized returns—without ever touching drywall.
Why It’s Ideal for Self-Directed IRAs
Wrap lending is a perfect match for retirement accounts:
- Lend from a self-directed IRA or solo 401(k)
- Earn tax-deferred or tax-free returns
- Stay within IRS rules by remaining a passive lender
- Wrap lending is perfect for small dollar IRA’s
Is Wrap Lending Right for You?
If you’re ready to be put your investment to work with a wrap lender:
- Increase your return on investment (Many start from zero returns, money is just sitting)
- Decrease your time involvement while learning
- Avoid taking 100% of the risk
- Leverage time working with a wrap lender
Then wrap lending deserves a front-row seat in your wealth-building playbook.
📌 Next Step:
Join us at Deal Maker Private Capital or start your free 7-day trial of LendPro GPT, your AI-powered assistant for structuring high-return wrap loans with confidence.
