Hi i imam

My wife and I started our real estate Vendor Finance business in 2003.  Happily for us, I was able to give up my job early in 2009 and we are now both enjoying working in our Vendor Finance business full time.

We'd suggest the main pitfall is believing that it's some form of get rich quick scheme.  Happily it's becoming more regulated by the new National Credit Code and this is helping to improve its image.

A few web resources that may help in your search for information about vendor finance in residential real estate are:
https://www.propertyinvesting.com/strategies/wraps
https://www.propertyinvesting.com/strategies/lease-options
http://www.jvpropertypartners.com.au/index.php?option=com_content&view=article&id=50&Itemid=75
http://www.vendorfinancelawyer.com.au/
http://www.vendorfinance.asn.au/   The Vendor Finance Association of Australia
http://www.vendorfinanceinstitute.com.au

Cheers,  Paul

Hi Scotty

Renting your Brisbane house out is simple but it's made easier by making sure you get a great Property Manager (PM) to look after your asset.  I'm sure our fellow forumites will be able to direct you towards a great PM in your area of Brisbane.

I would be very wary of advice from any financial planner whose only investment advice to you is to buy into managed funds.  If you are going to visit a financial adviser, possibly ask forum members here for referrals. 

Also, it's worth talking to your accountant about the Capital Gains Tax issues involved in renting out your Principal Place of Residence (PPOR).  There are also a lot of threads on this forum that cover this subject.  A search should turn up quite a few.

You mentioned the possibility of renting in Melbourne.  Instead of paying out dead rent money and if you can't buy a place in Melbourne traditionally, you might want to look at buying a Melbourne property with vendor finance.  They're not available everywhere and you do pay a premium price for the properties but you can usually get them with a very small deposit and you get the benefit of the capital gain on the property after you move in.

A pretty good list of available vendor finance properties can be found at:
http://www.renttoownhome.com.au

Cheers,  Paul

Hi Ben

Renting your Sydney house out is a simple process but it's made all the easier by making sure you get a great Property Manager (PM) to look after your asset.  I'm sure our fellow forumites will be able to direct you towards a great PM in western Sydney.

Also, it's worth talking to your accountant about the Capital Gains Tax issues involved in renting out yout Principal Place of Residence (PPOR).  There are also a lot of threads on this forum that cover this subject.  A search should turn up quite a few.

You mentioned moving up the coast and renting.  Instead of paying out dead rent money, you might want to look at buying a property with vendor finance in the area you're moving to.  They're not available everywhere and you do pay a premium price for the properties but you can usually get them with a very small deposit and you get the benefit of the capital gain on the property after you move in.

A pretty good list of available vendor finance properties can be found at:
http://www.renttoownhome.com.au

Cheers,  Paul

Hi daba

As you can see, with a "standard" call option your strike price and profit margin are visible to your buyer.  As I mentioned earlier, we use an option document that includes a "Higher Price" clause.  The effect of this clause is the new buyer does not see your strike price or profit margin.  Thi may or may not be attractive to you.  It depends how you are setting up your transaction(s).

Cheers,  Paul

Hi Leigh

We found Paul Siderovski to be a great "outside the box" accountant.  Not cheap though.  You can get his details at:
http://www.sidcor.com.au

We use Tony Cordato in Sydney as our solicitor because he's the best at vendor finance and coming up with new ways to get things done.  Tony's office number is 02 8297 5600.

Our experience is that you want to use the best no matter where they're located.  I suggest you give Richard Taylor a ring regarding your broking requirements.  He can be found on the Finance sub forum as Qlds007.

Cheers,  Paul

Hi squidgie

Quite a few people we know in Victoria use and recommend Gatherum Goss and Associates:
http://www.gatherumgoss.com/

Cheers,  Paul

Hi Steve

As you mentioned "Contract" I'm guessing you'll be using an Instalment Contract (IC) for this sale?  If this is the case you will be regarded as supplying credit.  You mentioned that your building a new 4 x 2. To work out how you need to handle this transaction, you need to ascertain if your loan, under the IC, is "regulated" by the current Uniform Consumer Credit Code or new National Credit Code, after 1 July 2010?

If you could let us know this we may be able to give you a few more tips.

Cheers,  Paul

Hi Veronica

I agree wholeheartedly with Richard.  Getting the correct structure for your loans and the entity you're going to buy in, is very important at this early stage, i.e. it stops a lot of headaches down the road.  I'd suggest you give Richard a call.

Cheers,  Paul

Hi Veronica

We tend to prefer houses to units.  I guess we agree with the old adage that land appreciates and buildings depreciate.  It has worked well for us so far.  However this rule of thumb tends diminish as you move closer to Sydney CBD (and Parramatta and North Sydney CBD's to a lesser extent).

A lot of people put their first IP's into the name of the partner with the largest income because the negative gearing has a more beneficial effect on the tax position of the larger income earner.  If this/these IP's are truly long term buy and holds, this isn't always the best strategy, depending on your years to retirement, etc.  I'd suggest you talk with someone like Richard Taylor (Qld007) in the finance forum, to get some advice on structuring your loans in the best possible way.

Cheers,  Paul

I like that duckster. you do the work and we get the kudos.  Thanks 

Cheers,  Paul