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Hi guys,
Well unfortunately my poor wife has come down with something overnight, and is not feeling well enough to get to this meeting this evening. We’re both really disappointed, but wish you all well – and hopefully we’ll see you all at the next one! Thanks again to Colin for organising this – I’m sure it will be very worthwhile.
Have a great night. Cheers,
Adam
Oasis Finance
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[email protected]I’m with you Elka. I never have an issue with it. Having said that – I look forward to experiencing this new forum Brent speaks of! Exciting stuff!
Thanks once again to the PI.com administrators for providing such a great FREE resource for us all!
Cheers,
Adam
Oasis Finance
for your Vendor Finance solutions
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[email protected]Cata,
Count me in at this stage – I’ll just confirm with my wife, but we’re certainly keen.
Tue nights are no good for us, so I’m thrilled that you’ve chosen a Wed! Thankyou.
As for finger food – I wouldn’t bother getting too involved in organising too much. We can all just show up, order our own dinner or snacks or drinks, and then sit down and chat. So I think the only real requirement is to book a table (maybe 15 or so seats???).
Hopefully we’ll see you all there!
Cheers,
Adam
Oasis Finance
for your Vendor Finance solutions
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[email protected]I’d certainly be keen, depending on the date. Coming from the city.
Cheers,
Adam
Oasis Finance
for your Vendor Finance solutions
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[email protected]Hi Don,
I just couldn’t resist answering this one, as it’s something my wife and I discuss often!
I am from Brissie while she is from Eastern Canada, so the obvious answer to a) is Brisbane and Halifax.
The answer to b) is where it gets interesting… and I’ll let my lovely wife answer for herself if she so chooses. But for me:
– Brisbane
– Halifax
– Whistler (BC Canada), because I LOVE skiing and where better than the No. 1 Ski Resort in North America! I also LOVE hiking in the summer months, and Whistler is a wonderful location for this too!
– Kandersteg (Switzerland), because we spent 3 mths during the summer (as hiking guides) and 2 mths during the winter (as ski guides) there at an International Scout Centre – http://www.kisc.ch – and it is perhaps the most beautiful place on Earth!
– Hawaii – not sure which island, but what an amazingly beautiful and richly diverse place!
– Gros Morne Newfoundland (only during the summer!), because that area is just spectacular, with incredible views on some amazing hikes. A World Heritage Listing proves it!And I think that’s about it for the moment! But if I think of more I’ll let you know…
Having said all this – what is the advantage of owning over renting in these places? If you rent, you get to pick and choose the best place every time, rather than having to come back to the same place time after time. You are also not encumbered with the inevitable maintenance that ownership brings with it. (Of course I am ignoring the financial benefits of rental income and capital gains – simply talking as if the only reason for purchasing would be to enjoy the convenience).
Cheers,
Adam
Oasis Finance
for your Vendor Finance solutions
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[email protected]Hi Searcher,
There is a Search function on this forum – look under “Forums” at the top of the page, hover the mouse over it and you will get a drop down box. Click on Search. Then do a search for “caravans” and you will see a lot of topics asking similar questions to yours.
I hope that helps!
Cheers,
Adam
PS. Great to hear some great inspiring stories here – well done guys!
Oasis Finance
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[email protected]Hi as41,
I’ve never seen any calculators on here, and I’ve been a member for a while now. Having said that, it’d probably be a good idea to have a section like that here!
Probably not the 11 Sec Solution though – it’s fairly simple to understand. Purchase Price of property / 1000 x 2 =<Rent.
So for a $100K property …. $100K / 1000 = $100 x 2 = $200. So rent must be $200 or more per week to pass this “test”.
What the 11 Sec Soln does is give you a 10.4% yield.
Steve decided that this was a simple equation he could do in his head that would serve to “filter” all of the potential properties he looked at, and leave him with a few that he could then go and do his due diligence on to work out whether or not they would actually make good +CF investments. It’s certainly not the be-all and end-all!
I hope that helps!
As for having that section – I’ve had a rethink while writing this, and jaffasoft’s website (www.jaffasoft.com) already has a fair few good handy calculators, so there’s really no requirement to duplicate, except perhaps to make this website a “one-stop PI shop”.
Cheers,
Adam
Oasis Finance
for your Vendor Finance solutions
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[email protected]jasevr4,
I’ve just gone back and actually put your example into my calculator (which I’ve only made a weekly thing at this stage – someday I’ll get around to giving the option of fortnightly or monthly, but I’m not THAT bored just yet!), and by my calculations, if you repay weekly, you will be paying $305.83pw. If you pay an extra $50pw (=$200pm / 4) you will pay off the loan after 1316 weeks, or about 25yrs 2mths, and you will have saved a whopping $76,151.67 in repayments! The power of compounding interest at work…
By the way, I have previously been referred to the following sites too…
http://www.ossix.net/mortgage/
http://ray.met.fsu.edu/~bret/amortize.htmlThey might also be of some assistance to you.
All the best,
Adam
Oasis Finance
for your Vendor Finance solutions
Achieve the Dream!
[email protected]Josh,
I suppose you could get the client to do that work for you, however you must bear in mind that they will be looking at the house from a very emotional point of view, whereas you will look at it purely as an investment. Therefore there is quite some potential for them to either miss, overlook or gloss over various problems or issues with the property. I’d say that it’s best to do all the due diligence on the property yourself, or at least get someone you trust to do it.
Remember – the reason you’re doing this due diligence on the property is in case the client leaves, and you’re stuck with a vacant property. Can you re-rent it, re-wrap it or sell it? You need to determine all of this.
Also remember the returns you will be getting on your money invested. They are quite substantial, and I’d suggest certainly worth a few hours driving and a few dollars in petrol. My wife and I don’t even own a car, so when we go to inspect a property we have to add on the cost of a car rental for the day – but it’s still worth it in the long run.
Plus doing your own due diligence gives you a bit more confidence in the whole deal, and you can sleep better at night knowing that you’ve crunched those numbers yourself and it all works out.
These are good questions that you’re asking! Good work! I’m enjoying this thread!
Cheers,
Adam
Oasis Finance
for your Vendor Finance solutions
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[email protected]jasevr4,
I’ve developed a simple excel spreadsheet that does exactly what you’re after. I’d be happy to send it to you if you PM your details to me.
Thanks must go to Jaffasoft for providing me with that elusive equation that works out P&I repayments on a loan – without that, this calculator would never have happened! I also therefore recommend people to Jaffa’s website – http://www.jaffasoft.com – as it has some other really good calculators.
Cheers,
Adam
Oasis Finance
for your Vendor Finance solutions
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[email protected]Originally posted by joshknack:1. What sort of investment vehicle is best? At the moment I am thinking it should be a private company, but are there ever problems with securing finance for such a vehicle?
You’re best to speak with an accountant on this one. I’ve taken out my further comment here, as I am not qualified in any way to give advice. So definitely speak with an accountant.
2. What is the best way to find buyers?
ADVERTISE! Put ads in papers (decide where you want to concentrate on first), put up flyers, speak with REAs, tell them what you do and hand out your info to them, do mail outs through Aust Post, put ads on the internet property sales sites, etc etc. Carry business cards around with you wherever you go and hand them out to people and tell them what you do. There’s no secret easy way of doing this (well I haven’t found it yet anyway!).
3. Is it possible to secure a 100% financed loan to do a wrap, but require your purchaser to put forward a deposit?
I guess it’s possible, but why not use the deposit that you require your purchaser to make as YOUR deposit too? I understand that you want to try and do this as close as possible to “no money down”, but there has to be SOME money in there. Also, if your purchaser is contributing a deposit, you will want to put this directly against your loan in order to reduce your debt as quickly as possible. You always want to maintain a good margin between the amount of your loan and the amount of your purchaser’s loan. Meanwhile, you might struggle to get many people who have a deposit who also need your services. One of the big reasons a lot of people can’t get finance is because they can’t get a deposit together (on top of other reasons). So you’re dismissing a large section of your potential market by demanding a deposit. That’s just how we work based on the advice we have received and our subsequent experience – I’m sure others may disagree.
4. How do you ensure purchasers effect a refinance of the property? I would prefer not to be stuck with repayments for 25 years.
You could simply write it into the contract – a term of XX yrs, with a balloon payment of $xxxx on settlement. But my question to you would be WHY? To use an example – You purchase a $100K property. You onsell it under an installment contract for $120K over 30 yrs. Your interest rate is 7% and you set the purchaser’s rate at 9%. Therefore (assuming you took out a %100 loan – for simplicity), you will be receiving approx $70 net per week. If you decided that you only wanted the deal to go on for 5yrs, you could write that into the contract, with a balloon payment of $115K on settlement ($115K being the approx residual on the purchaser’s loan after that time).
So, you take that $115K and pay off the residual of your loan of $95K (approx), and put the remaining $20K in an investment earning 10%. This will give you about $2K per yr.
Alternatively, you let the deal run it’s course, and continue to receive $70 per wk for the next 25yrs. $70 per wk translates to $3640 per yr, which equates to about an 18% return on that $20K.
Now, before the hounds jump in and tear my little (oversimplified) example to shreds – this is just a very quick calculation and example to give you one reason why you would let the deal run it’s course. Others may prefer to get their money working for them more. That’s fine. Each to his own. I like the idea of “set and forget” – especially considering all the work that was required to get that deal up and running in the first place.
Well I hope this has given you some food for thought, and perhaps helped to answer some of your questions. I want to leave you with the fact that Vendor Finance is certainly NOT easy to start up – it takes a lot of hard work (and a MASSIVE amount of assistance and advice and encouragement from our wonderful mentor!). The rewards are certainly there, but there is no doubt whatsoever that you DEFINITELY earn them!
Cheers,
All the best,
Adam
Oasis Finance
for your Vendor Finance solutions
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[email protected]Dazzling,
Great to hear! Well done – after reading Kiyosaki’s “Retire Young Retire Rich” where he talks about it becoming easier and easier as you move further up in the investing world, I have often thought about this concept. So it’s really good and encouraging to hear about a “real” person actually living this concept (and in Australia too!).
Again – good for you, and best of luck with finding that tenant!
Cheers,
Adam
Oasis Finance
for your Vendor Finance solutions
Achieve the Dream!
[email protected]Hi mumofthree,
A good post, and a good question. This is something that Steve tries to get across quite often – YES this looks good from an 11 second solution point of view. But the point Steve keeps making is that this equation is simply a FILTERING device – it just narrows down the field of potential properties to those which MAY return a positive CF. So the 11 second solution is simply THE FIRST STEP! And I’m certainly not trying to downplay what you’ve found here, because in the current climate it’s not too easy even getting this far!
Once you have filtered out the 99.99% of properties that DON’T pass this equation, you are then left with a small number of properties which you can then go on and do your DUE DILIGENCE on – and this includes answering all the questions you have asked, and more:
– What is the area like? Will this property achieve reasonable CGs?
– What are the vacancy rates in the area? How difficult will it be to get new tenants when the current ones leave?
– The Advert says “rental EXPECTATION is $130pw” – where does the agent get that figure from? Are they simply putting that in to try and snag the +CF investors who have read Steve’s book?! Or is that actually based on realistic figures?
– The Ad also mentions “a little TLC” – just how much TLC does that mean in dollar terms?! Remember – the agent wrote this ad to try and sell the property! They are not by any stretch of the imagination unbiased!
– Etc etc etc – the list goes on.Once again – I say all of the above NOT to frighten you away. Far from it! I highly commend you for finding this potential deal, and now strongly encourage you to go about doing your due diligence on it! I sincerely hope it passes with flying colours, and you snag yourself a good +CF property out of all of this!
What I would suggest you do now (if you’re still keen on this deal) is to put in an offer on the property, with some good solid release clauses in there so you can pull out if you find anything you don’t like during your due diligence. That way, you’re securing the property for yourself while you do your research, whilst not obligating you to purchase if you’re not happy with it. Nothing worse than putting in a lot of time and effort into something, only for it to be plucked out from under your nose by someone else because you weren’t quick enough!
I hope that’s helped a bit.
All the best,
Adam B-C
Oasis Finance
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[email protected]G’day Nathan,
Good on you for getting out there and doing something about your financial situation – I wish you all the best.
Have a look at the following link to give you one (very one-sided!) view of this guy:
http://www.jenman.com.au/find/index.php?query=jamie+mcintyre&type=simple
But then to give you an idea of just how one sided that view might be, have a look at this link:
https://www.propertyinvesting.com/forum/topic/22238.html?SearchTerms=jenman
So I guess the moral of this reply is – TRY to do your due diligence before getting too deeply involved in ANYTHING, but of course you will get conflicting opinions on everything! [blink] So sometimes it can be tough to work out what’s correct. I would suggest though that you try to find someone who has bought the package, and ascertain their opinion.
I hope that helps!?! Maybe it just clouds the waters even more!
All the best,
Adam
Oasis Finance
for your Vendor Finance solutions
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[email protected]Considering what you do for us Richard, I’d be happy to be your coffee buddy every day of the week![biggrin]
Cheers,
Adam
Oasis Finance
for your Vendor Finance solutions
Achieve the Dream!
[email protected]Another quick thought – if you are keen to dig deeper into these deals, feel free to share elements of your due diligence with the forum. There are some very experienced property investors who frequent this place, and you may get some help / advice / suggestions / ideas that you would otherwise not have even considered.
What I’m trying to say is basically GO FOR IT! Don’t jump in without consideration, but at the same time don’t allow your doubts to overcome your enthusiasm. I think that may be the biggest killer of good ideas – self doubt. So don’t let it kill yours! And use the forums to help you (if you like!).
All the best,
Adam
Oasis Finance
for your Vendor Finance solutions
Achieve the Dream!
[email protected]Hi again Swifty,
On the surface these numbers look great – the key is what surrounds the numbers. This is where your due diligence comes in. You need to be able to determine what the risks are in the deal.
In my work we sometimes use a tool called a “SWOT Analysis” – it stands for Strengths, Weaknesses, Opportunities, Threats. And it works as the name suggests – you simply develop four lists, one under each heading, and then analyse the results.
Just conduct a really good brainstorm (another skill that is surprisingly difficult to master – we generally want to subvert our wilder, more innovative ideas for fear of failure or ridicule!), and you will probably get a decent idea of the quality of the deal out of this process.
Hope that helps!
Cheers,
Adam
Oasis Finance
for your Vendor Finance solutions
Achieve the Dream!
[email protected]Wealthy,
Great work! Well done.
They ARE still out there!
All the best,
Adam
Oasis Finance
for your Vendor Finance solutions
Achieve the Dream!
[email protected]IAS,
Great to hear that you had such a great time in Brizzy – it’s not such a bad spot is it! (Yes I’m biased!)
I must give you a BIG CONGRATS for sticking to your guns and not purchasing anything on your trip – you were very wise and very self disciplined. Now you have some breathing space, and you can sit back and objectively analyse the info you were presented with, and make an unemotional decision. Good work.
All the best – I’m sure you’ll do really well as a result of your obvious enthusiasm and thirst for knowledge.
Cheers,
Adam
Oasis Finance
for your Vendor Finance solutions
Achieve the Dream!
[email protected]Swifty,
I’m afraid I’m with Simon – way outside my knowledge base!
Best of luck though – keep learning and keep asking and you will eventually find all the answers you need.
Cheers,
Adam
Oasis Finance
for your Vendor Finance solutions
Achieve the Dream!
[email protected]
