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Any idea on which banks other than the big 4 which may be interested. W/Pac is our normal bank but its like pulling teeth and they want more pre-sales- we have sold 2 with another 4 deposits taken which is pretty good in 4 months and so early into development
jmn
Thanks for your help- we are looking in NSW
jmn
Hi Terry,
Sounds like the crew you lined up for 15% is far and away your best option. I believe with Steve, spending a few hours on it is worth it-if it comes off you have made $1000 per hour and with minimal worry.
I have had court orders placed on tenants to pay and I am always apprehensive about throwing good money after bad by spending more money on collection agencies or baliffs. Even if the court has judged in your favour, often people doing runners have no other assets and no fulltime employment. If they are not full-time employed, you cannot touch them-however the order does stand for 10 years so any time during that time -that they become fully employed-you can approach them for repayent. Default of payment puts automatically puts them on the poor credit risk which means they will not be able to access a loan until they have paid their debt.
I have only ever been succesful a couple of times and that is when the court places a guarnashee on their wages-giving you guarantee of payment.
This case, and there are plenty of them, shows the other side of the investor argument. If there are investors out there taking advantage of their clients, there are also clients out there taking advantage of the investor. Hence the need to make the monetary risk worthwhile.I hope you succeed-please keep us posted!
Cheers
jmn
Thanks for reply Steve.
I am in agreement that deposit is most often the stumbling block for people. It is no different in renting properties to tenants-they can all meet the weekly payments (or so they will tell you!) but often many struggle to find the $1000 or so up front bond.
A further comment/question/observation;
I would assume the “life” of a wrap deal would be only in the order of a couple of years. The prudent client entering into such a deal would re-finance as soon as their equity had built up through either capital repayments or capital appreciation. (do you tell them this and encourage this process?) Therefore the prudent financier needs to ensure the price of onselling of the property takes this into account. My concern as I mentioned is based on how can we make these deals in a tighter climate, more client friendly.
You would hope to net a minimum $10,000 on a property for finding and matching home/client. If they refinance then within 2 years you have probably made in the order of $15,000 before Tax on the deal. Has anyone thought or better still used the option of reducing the onselling cost to the client and in turn having a balloon type payment should they refinance within say 5 years. This would essentially reduce the purchase price and their repayments over that period (and may make the difference initially between affordability or not).At the same time it gives the financier a longer, more durable income stream. Balloon type payments on real estate where your property is increasing in value is surely more plausable than balloon payments on car finance when the life of the loan often “outlives” the life of the car (especially if you drive as me wife does! Hope she does not read this!). The car value has decreased at a time where the balloon payment is required but in real estate, the contrary applies.
Any thoughts out there?
jmn
