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It depends on what tool you are using. Steve will tell you to use the right tool for each job.
We just bought a house 2 weeks ago for 110k, with 80% funded by a P&I loan. The other 20% (and the closing costs) is funded by a LOC on our own house, so the purchase is 100% funded by bank money (and the wrappee’s deposit of 3k). Our total payment is 706.71/month. We have already got the property wrapped for 134,900 to new owners who will move in on the day after settlement (11th October) and who will be paying us 1115.83/month. Cashflow is 409/month for no money out of our pocket.
100% finance was a good tool for this wrap.
We have rental properties though, and we pay them down as fast as possible.
Different tool for a different job.Hope this helps
Lance
.
Fair Go Homes
http://fairgohomes.com.auRapt with Wrapping!
(07) 5465 4999
[email protected]My wife Arnie and I own a web developoment and hosting business that’s recently (since reading Robert Kiyosaki) been turned into a national dialup ISP as well. locknet.com.au. We also own a wrapping business fairgohomes.com.au which followed this path: RobertKiyosaki->JohnBurley->Bradley-McKnight->Reno Kings. We are falling behind due to some finance hassles – only 15 income-producing properties so far (sold one, and 4 with JV) – but now the finance is solved, we should get back to our goal.
In the past have been in journalism, TV cameraman, copywriter, sales, manufacturing ladies fashion accessories (we had our tiny business for 22 years). All this came in handy last week when I had to write a TV commercial for LockNet, and no doubt will be useful on Friday when I am present for its production.
But you know, the most important of these “careers” is my Christian ministry. It’s to gain the freedom to pursue that more fully that we are building our investment portfolio. And counselling, helping people wiht their lives and problems, and finding meaning in life: that’s where it’s at for me.
Gotta have a good reason, or why bother?
Lance
.
Fair Go Homes
http://fairgohomes.com.auRapt with Wrapping!
(07) 5465 4999
[email protected]Hi
Good to see you wanting to get into the game.
We are already well down the road with international investors (JV or money partners) as we have a business associate in the USA who wanted to invest with us here. We asked our accountant and solicitor, and this is how we are handling it…
We found it well-nigh impossible to find a US lender who would lend our Joint Venturer (in Oregon USA) money on an Aussie property. And we could not locate an Australian lender who would lend money to a US purchaser, no matter how well his credit stacked up.
So we have created an Australian Pty Ltd company which is owned 50/50 by our trust and the JV partner. I am sole director. The Australian-registered company can borrow money from an Aussie lender on Aussie properties. The title is in the name of the company and the company is responsible for the repayments. The JV partner owns half the company, so he owns half the houses. However, he puts up all the cash to create a deal (deposit and closing costs). This is as it should be, as we not only do all the work, but our credit is on the line…we are responsible for the loan repayments. Profits/losses are split 50/50, starting from occupation day of a wrap property.
We have another international investor that we are about to start working with. He has just received his 401k, and is a close friend of the first one.
In his case, we are going to use his funds for the deposit and closing costs, and pay him a flat 10% interest-only per month. He gets a 2nd mortgage to secure his loan.If anyone has found better ways to do this, I am all ears!
Best wishes to all the Propertyinvesting.com readers,
Lance
.
Fair Go Homes
http://fairgohomes.com.auRapt with Wrapping!
(07) 5465 4999
[email protected]Hi Brett
Sooshie is quite correct, but this detail may be what you are looking for…
Wrappers should not be selling to people who are WAY outside the banks “square”, but to those who are only slightly outside it. e.g. people who have a good income, but for some reason are not quite acceptable to the bank. Perhaps they damaged their credit by not paying their mobile phone bill 5 years ago, or they have not been in their job a long enough time for the bank, or have a large enough deposit, or (horrors!) they work for themselves.
If their rental history going back 5 years or so is good, and they will pay about the same as their previous rent to buy a house, why should we conclude they are a bad risk?
We still treat the situation very carefully, and satisfy ourselves that the person is a good risk, and as far as we can, an honourable person who pays for the roof over their head FIRST, before the pleasures of life.
A proper credit check, and a careful interview of the current and several previous landlords is vital.
Hope this helps [
]Lance
.
Fair Go Homes
http://fairgohomes.com.auRapt with Wrapping!
(07) 5465 4999
[email protected]JP asked: “why did you decide not to wrap this latest purchase? I am assuming you’ve bought in an area that you’re confident will have good future capital growth?”
Short answer: Not just that, but yes.
Long answer: Well, in our area capital growth has been negligible in recent years, but it is just starting up again. This particular house is a very cute old Queenslander cottage – an original building in the town – which was originally built as a worker’s cottage for a butter factory. It’s got the verandah at the front, the lattice and the scrollwork, is already painted in heritage colours, but is very tiny. Indeed, there are just four rooms (bed1, bed2, kitchen, lounge) and at the back there is an “outbuilding” with the bathroom, and another room that was a laundry, but which we will make into bed3.
In other words, it’s a house that is not particularly practical for families, but it has great emotional appeal for someone that wants to live in a restored Queenslander. It’s less than 2 blocks from the centre of town, so it’s good for a couple or single person who wants to walk to work. The market for such a house on a wrap is pretty limited, as it’s impractical for a family, and those that would want to live in it would probably have the ability to get their own finance.
However, at the moment, there are other similar houses in the street that have been done up (indeed a slightly bigger one across the road just sold for 85k) and so we feel this one is a better-than-average buy for capital growth (for our area, anyway). We don’t want to sell it, but we will refinance it to take our profit as the market rises and the rent increases.
e.g. If the tenant has a car, and pays on time for a year, we will put up a carport for them (cost 1200, valuation increase 6000). If they don’t have a car we will maybe offer them a ceiling fan in the bedroom etc. This keeps the rent high, and the tenants high quality and happy. And of course, we are creating our own capital growth. This trick we learned from Dolf de Roos.
Hope this helps
Lance
.
Fair Go Homes
http://fairgohomes.com.auRapt with Wrapping!
(07) 5465 4999
[email protected]Thanks to those who replied with encouragement. [
]Maybe we are a little misrepresented though – we learned about wraps last November at a John Burley seminar, bought the Wrap Library from Steve and Dave, set our team in place after much careful research, and did our first two wraps mid year. One was wildly successful financially (65% C-on-C return), the other moderately (20%). We found it easy to do by simply following the Wrap Library steps.
We then realised we needed to sort out some other businesses we had so as to free up time to wrap. That took some months.
So when we went to the seminar we already had our eye on a few suitable houses. However we held off making any deals until after the seminar because we were sure we would learn some money-saving techniques on the weekend. And that we did!
I just wanted to explain this so no-one assumes we jumped in blindly after a two-day seminar – however good it was – and that it’s safe for them to do the same. But if you’ve been researching wraps for a while, you already know MORE than most investors, most Real Estate agents, and almost all vendors. That last thought struck me while listening to Stuart on the weekend. The vendors have sold property maybe a couple of times. We however have made offers and/or bought property dozens, perhaps hundreds of times. Who is the experienced one who is likely to get the best win in a win-win deal?
So do your research, learn, but there comes a moment when it’s time to move. And that time comes BEFORE you know everything, because you will never know everything.
Cheers as always!
Lance
.
Fair Go Homes
http://fairgohomes.com.auRapt with Wrapping!
(07) 5465 4999
[email protected]I second all of that.
SUCH a great collection of details. So many ways to tighten up and improve a deal that we will make the cost of the trip and seminar back many MANY times over. We had been holding off putting offers on a couple of local properties (the numbers work, but we hadn’t inspected yet) until after the seminar because we knew we’d pick up some points to make these great-looking deals even better. We were not disappointed!
Already rang the two agents concerned to set up inspections this afternoon.
And a great bonus for us was that Geoff Doidge was sitting nect to me on the plane from Sydney to Brisbane last night… even more tips! The nice thing about the presenters you chose Steve, is that like yourself they are all humble people who are happy to help others with their knowledge – whether they are getting paid for it or not.
Keep up the good work.
Lance
.
Fair Go Homes
http://fairgohomes.com.auRapt with Wrapping!
(07) 5465 4999
[email protected]Queensland? Yes of course!
FHOG is paid by the Govt after the person has been in the house a year (and has paid a certain percentage of the initial price – important to note that the “amount paid” calculation includes deposit, principal, and interest. Usually this is reached by somewhere between 10 and 14 months). Here http://www.legislation.qld.gov.au/Legislation%20Docs/CurrentF.htm there are links to the superceded and updated versions. Scroll down to
“First Home Owner Grant Act 2000 (FirstHomOwnA00) [Superseded Versions]
First Home Owner Grant Act 2000 Correction Notice (FirstHomOwnA00c)
First Home Owner Grant Regulation 2000 (FirstHomOwnA00) [Superseded Versions]” and read it straight from the horse’s mouth. (This site also has excellent references to the different FHOG treatment in the states BTW)There are quite a few solicitors now in QLD who are involved in wrapping from the legal end. Ours is Mark Game – Level 9/193 North Quay Brisbane (07)3236 0005. Tell him “Lance Hunt sent me”. Pity I don’t get a commission though.
Hope this helps
Lance
.
Fair Go Homes
http://fairgohomes.com.au
Rapt with Wrapping!
(07) 5465 4999
[email protected]G’day Steve,
Although I know (believe me, I know!) what a drag it can be to configure a bulletin board, you may eventually want to consider a different system. (and perhaps sooner rather than later, while there are relatively few posts to move)
We have used WWWBoard, UBB, YABB, WREQ, but now we are now using the free Phorum (from phorum.org) which is very easy for new users to use, and also addresses the issues of finding “new” posts, knowing which reply in a thread was to which post, security of user’s info. It does require MySQL and PHP to be available, but any decent host provides those. (we do!) It’s also easy to configure the look of it, and as administrator you can add and hide many forums easily.
Examples can be seen at some of our client’s sites.
e.g. http://www.bassmex.com/phorum/list.php?f=2
http://www.basswise.com/phorum/phorum-3.3.1a/list.php?f=1Hope this helps …but I fear the thought of starting again will merely cause you to despair. I make the comment merely to give an option. [
]Cheerio
Lance
.
Fair Go Homes
http://fairgohomes.com.au
Rapt with Wrapping!
(07) 5465 4999
[email protected]
Different tool for a different job.
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