Hi Everyone,
has anyone here attempted to wrap a house and land package to a tenant. The benefit to me purchasing is getting a home at approximately $20k below median price, and most importantly no money into the deal!
Just wondering if anyone has experience in this sort of things and can maybe highlight some pitfalls.
Regards,
Steve Gibson
Check your House And Land Finance approves you to sell it on Vendor Finance……for starters.
Check the H&L contract allows you to do the same.
As with a lot of House and Land Packs, $20,000 under the Median House Price don’t mean sheet if you paid $40,000 over Market Value for the thing in the middle of nowheresville to begin with.
YOU WILL have to wait for the market to catch up with the price you would probably overpaid for a H&L pack and then wWAIT SOME MORE for the market to catch up with the price you sold it to your client on terms……..How are they going finance out of your higher interest deal possibly years later when the bank won’t value it at the price you sold it to them.
And a lot of the H&L packages don’t do no deposit deals for investments as there is no FHOG avail in this case.
What you are effectively doing is paying too much for a house and then selling for even more…..
Try looking to buy houses cheaper than market so as to give your wrap clients a good deal.
Be very careful as the market flattens.
Live, Learn and GrowLifexperience
Hi,
lifeX, do you mind if I ask you how many wraps you’ve done so that I can put your comments into some sort of perspective? Just some clarification on my previous post. The suburb where we’re building is approx 5 minutes to the beach, in the preferred (compared to Northern Sprawl) Outer Southern suburbs of Adelaide. Lots of building and activity down there. We’re looking at No Deposit purchasing as a great way to gain exposure to the upgrade and potential capital gain of this beachside suburb. We’ll be selling on a wrap to gain cashflow +ve too. Worse case scenario is, if we can’t wrap it, I guess we’ll be living there! I see a lot of “Seachange” potential there in next 0-5 years.
Regards,
Steve Gibson
As far as wraps go, I have NOT done a large number of these. This does not change my points which are facts, not a matter of opinion.
Put into your perspective that I think H&L packs are a rip off though.
Also allow for my opinion that I think the market may flatten out in the next 5 years.
Cheers and best of luck with your due diligence.
Live, Learn and GrowLifexperience
Hi Steve
We have done what you might call “traditional” wraps but not via H&L packages so I’ll stay out of that part of the conversation.
Just a quick point on “wraps” in S.A. Selling real estate via an Instalment Contract (normally called a “wrap”) in S.A. is illegal. However don’t let this put you off. You can use the lease/option strategy in S.A. quite legally.
Good luck, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
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