Some very positive ideas on this thread. I think Steve’s point about the cost involved in setting up something like the VFA is very valid. Certainly it mostly started because Rick devoted an enormous amount of his time, money and office resources to the project. Without him it never would have begun. So thanks Rick!
Regarding Victoria, Lewis O’Brien (one of the main wrap lawyers in Melbourne) is planning to run an information night in mid February. Perhaps this would be a good opportunity to get Vic wrappers together and maybe work out where we would like to go from here. I’m sure if it was discussed with Lewis before hand, he’d be happy to be involved. He certainly doesn’t like rogue wrappers either!

Keep smiling
Felicity

Rob
Obviously my last post wasn’t clear enough – wraps were NEVER mentioned in the initial stages of searching for finance. We never got anywhere, so never bothered!
I spoke to a number of lenders myself, and basically it seemed to be a Victorian thing, caused perhaps by some less than ethical seminar presenters who taught people to inflate the price of a contract and take back some form of under the table payment at settlement. Basically the lenders felt that if vendor finance was involved, that’s what was going on. I even had one valuer who commented without any hesitation that if there was vendor finance involved, he’d only value the house at 80% of the contract price – that’s what the lender he was working for had told him to do.

Keep smiling
Felicity

Rob
Wraps had nothing to do with it – at the time my broker and I were searching for 80% LVR lo doc finance, we were purely looking for someone who would do it with the vendor financing 20%. The best we had was an offer of 64% LVR (ie 80% of the 80%). Basically they were taking the 20% vendor finance off the price of the house, because they seemed to think that if the vendor had left money in, it must be some sort of scam, and they discounted the price accordingly.

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Felicity

In my experience, vendor finance is possible if you’re using standard finance. But certainly in Victoria, the lo doc lenders are EXTREMELY nervous about it! I had more than 15 lo doc lenders knock the deal back (or only offer to lend 80% LVR of 80% of the purchase price) because of vendor finance.
I’m not sure if the same is true in other states.
Bottom line – make sure you’ve got a lender who is happy with this type of thing BEFORE you find the deal!!!

Keep smiling
Felicity

Oldtimer
I have always looked at wraps as a cashflow business, and that’s it. That strong positive cashflow is the reason I have been able to buy as many houses as I have – we’d already been stopped at around 4 with normal rentals (and yes, they were positive cashflow, but only a small amount each). It’s also the reason my husband doesn’t need a job any more (well, almost!).
The next step is to take some of the excess cashflow from wrapping and put it into buy and holds. Yes, that’s where the long term wealth is. But if we’d used buy and holds up until this point my hubby would still be working at a job and we’d still have a long way to go before he was free.

Keep smiling
Felicity

As far as I’m aware, Rick wasn’t given any questions in advance. He was also given the impression that he was going to be given the opportunity to present his side of the story in a fair, balanced manner. That all went out the window as soon as the interviewer opened his/her mouth.
I also don’t agree that Rick didn’t know how to answer the questions – he did, but he was so busy trying to answer them in a way that didn’t give A Current Affair any opportunity to quote him out of context, it was inevitable that it didn’t appear as though he knew the answers. And you can bet that A Current Affair used all the examples that put Rick in the worst possible light.

Keep smiling
Felicity

Thanks for the kind words Wayne.
I’m sure my turn will come to be on the receiving end. I’ve copped that sort of stuff before, and probably will again.
Yes, it’s upsetting to be accused of stuff that’s nothing like what I actually do, and I’m sure there are people in other lines of business who feel the same way (used car salesmen? hehe).
In the end, though, when it gets me down, I sit down, look at a list of my wrap properties, and one by one I think about the families in those homes. I think about the things THEY say, because in the end, they’re my customers and if they’re happy, does it really matter if people who know nothing say a whole load of garbage?
Even more importantly, I think about some of the first people I wrapped homes to, who have now refinanced and moved on. I’d blush if I repeated some of their comments of gratitude here.
I’m as keen as anyone to remove the ratbags from the industry. Once, just once, I’d like to see a POSITIVE article about wrapping, quoting people who’ve done this and been successful. There’s so many of them out there, and yet you never hear their side of the story. API came close, and then pulled the pin on the story.
I’d also like to see pigs fly, I guess…. hehehehe

Keep smiling
Felicity

As far as I am aware, you cannot claim the FHOG on a lease option, as you are not in the process of buying the house until you exercise the option.
With an instalment contract, the position varies from state to state. Some, such as Victoria, allow you to claim the FHOG straight away, as long as you sign a form stating that in the event you don’t go through with the purchase, you will return the grant. Other states require a time delay, or a % of the price to be paid off before paying the grant.

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Felicity

I usually find the house and then the buyer, so haven’t done many in the way you’re describing. However I have done a couple where an agent approached me about a house for sale where the renters wanted to buy. In those scenarios I sat down and worked out the figures and then told them – this is how it’s going to work. Both times the families were quite happy about it, they realised that I had to make money, and they were okay with that. I guess if they hadn’t been, the deal wouldn’t have happened. Both these were set up a couple of years ago, so the houses are now worth more than the wrap price, so they’re not complaining! However I did explain to them at the time that if prices went flat, they would have to wait longer to refinance, and that was a chance they were willing to take.

Keep smiling
Felicity