Hi Robert,
I have never purchased or done a lease option on a house that suits a particular purchaser. If I am purchasing a house to onsell with vendor finance then I have a simple checklist – 3/4 bedrooms, 1/2 bath, nice house close to schools, public transport etc. That way I will have a large list of prospective buyers to choose from, not just one particular purchaser. This is partly because if they change their mind, or don’t qualify, I don’t want to get stuck with a house that they like and I can’t onsell. I always find the house BEFORE I find the buyer.
As a first step I would suggest you have a chat to a lawyer who understands vendor finance so they can advise you on what type of deals work best in your State. I say this from personal experience because whilst I live in Tasmania, I do most of my lease option deals in NSW where there is no stamp duty on the Option. Here in Tasmania it is the same as Victoria and there is a double dip – stamp duty upfront on the option, and then stamp duty when the purchaser settles on the property. It is easy to get caught as the rules can be very different.
Paul Dobson is correct that Instalment Contracts might work better than a Lease Option (rent to buy) for you in VIC, due to the stamp duty issue, but there is always the chance that you will come across a deal where the cost is worth it, so it helps to understand how they both work.
Lewis O’Brien (Phone: 03 9888 6388) is a lawyer who understands vendor finance and would be a good place to start. The Vendor Finance Association also holds meetings quarterly in VIC and that would be a good place to go and talk to people who are doing what you want to do.
Just doing those few things should help clarify for you what strategy you want to do.
Secondly, NEVER try and do your documents yourself. I always get a lawyer to do my documents – I get the buyer to pay for them (direct to my lawyer). It is just not worth the risk for any of the parties involved.
Thirdly, get a good accountant who understands vendor finance – you will probably need to do some research. I live in Tasmania and my accountant is in WA, but he understands everything I do and it works fine.
In regards to how you set up your deals, you will be directed by what is allowed in your State. For example, you cannot pass on the costs of maintenance and repairs with a Lease Option in NSW, so just make sure you understand what you can and cannot do.
Let me know if you have any questions. If I don’t know the answer, I will be able to point you in the right direction.
Regards,
Deanne
Deanne.
