I am yet to do my first wrap but do have tennants in neg: geared props that would go along with it if I approached them. To make it worth-wile to me initially do I try to get a decent deposit from them. I’m thinking if they can afford a decent deposit, can they get their own finance from a lender apart from me.
To me it’s still important to have a win/win happening, all of my tennants so far are ‘the tennants from heaven’. I dont want to do the wrong thing by them but also want to gain myself. Am I looking at this whole scenerio the wrong way?Regards
Bernard
Bernard, if your tenants had big deposits they should definitely be able to get normal financing. I would only offer the deal to them if they for some reason couldn’t obtain normal financing, and really wanted to buy a house.
I think it wouldn’t be too good if they took you up on a deal, paid above market, and a higher rate, and then found that they could have got standard financing, and bought a cheaper property. Unhappy wrappees!!
You could perhaps offer them the traditional ‘vendor finance’ of a 2nd mortgage, at a higher rate than standard. this way they get the bulk of the funds from a traditional lender, and you lend them the rest. You get some cash, and some income on your loan to them this way.
Cheers
Mel
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