Hi Brad

Here's another to have a look at:

http://www.propertyinvestorsystem.com

Cheers,  Paul

Hi Barney

As both Richard and I agree that you're unlikely to find what you're looking for in the open vendor finance (VF) market in Brisbane at the moment, let's look how it might be done.

First up, VF is just another form of financing your property purchase.  If the 'numbers' work for you regarding renting out a room or two that's fine but have a fall back position if sharing your PPOR with others doesn't end up suiting you.

This leaves you with the task of going out there into the market and finding a seller (vendor) that will VF you into their property.  Before you get out there on this quest    I'd suggest you ensure you've researched VF as thoroughly as you can.  This could range from reading through the links I'll add to this post, to doing a VF course provided by one of the VF educators.

We have been working in the residential real estate vendor finance market place since 2003 and you may be interested in a blog post I've just posted called '10 Mistakes to Avoid with Vendor Finance'. It's at:

https://vendorfinanceinstitute.com.au/10-mistakes-to-avoid-with-vendor-finance/

The Vendor Finance Association is a great place to meet vendor financiers. Dates and details of meetings are available at: http://vendorfinance.asn.au/meetings-and-memberships/

If you decide to do a VF course, there are numerous educators to choose from. Some that spring to mind are:

Sean Summerville – http://www.thepropertyking.com.au/

Rick Otton – http://www.rickotton.com/

Dave & Julie Siacci – https://vendorfinanceinstitute.com.au/siacci-system-of-vendor-finance-1997/

Paul Zalitis – http://www.aussiewrapper.com.au/Cash…Investing.html

It is worthwhile researching all these educators and choosing one that suits your style.

Some other research locations are:

https://www.propertyinvesting.com/strategies/wraps

https://www.propertyinvesting.com/str…/lease-options

http://negative2positive.com.au/info…vendor-finance

http://www.vendorfinancelawyer.com.a…ance_intro.htm

Cheers, Paul

Hi Sam

A good source for reading up on 'payment arrangements' for Stamp Duty in NSW is available at:

http://www.osr.nsw.gov.au/lib/doc/forms/osr017a.pdf

However, as it says there, 'interest will be charged on all extended payment arrangements'.

Cheers,  Paul

Hi Tony

As a general comment, if you're buying from a vendor financier you're probably buying at a premium price.  Therefore, if you were planning to rent out this property, your negative cash flow may be higher than if you organised a vendor finance (VF) purchase directly from a seller.

If you 'buy', i.e. take control of a property with a Lease/Option (Rent To Buy) you will need to ensure that the Lease gives you the right to sub-let.  Most of the Instalment Contracts I've seen require the buyer to get the permission of the seller to rent the property.  A lot of vendor financiers, selling with Instalment Contracts, only sell to owner occupiers, so make sure you have approval to rent before you authorise the paperwork.

Cheers,  Paul

Hi rusty

The question as to whether you can offer your property for sale with a vendor financed credit contract, without the need for an Australian Credit Licence (ACL), revolves around the question; are you conducting the transaction 'in the course of a business'?  The general consensus is that you probably won't need an ACL, if you sell one of your properties with a VF credit contract, i.e. an Instalment Contract or Deposit Finance.  Of course, this is just a personal opinion. Check with your lawyer.

However, not needing an ACL for this transaction does not mean that the transaction doesn't have to be conducted in accordance with ASIC 'Responsible Lending' requirements which are quite extensive.  Like Matt, we insist that all our buyers receive independent legal advice prior to authorising the legal paperwork.

Managing the loan that results from a VF credit contract is very different from self managing a rental property.  There are draw down reports, notices of payment change, statements (with ASIC prescribed information in them) and there are defined ways to handle buyers in 'hardship'.  My advice is to find a specialist vendor finance management company.

As Matt said, most Instalment Contract interest rates are locked to the underlying loan of the vendor, with the vendor's rate being called the 'Reference Rate'.

Our website at  http://www.negative2positive.com.au has been setup to promote our service, i.e. to help vendors sell their properties with VF.  However it does have a lot of good free information that should help get your head around what's involved.

Cheers,  Paul

Hi John

Different lenders have different requirements.  The safest way is to find out from your lender who they will accept as an approved Witness.  As you know, they are lending the money and they make the rules in this respect, e.g. if the need the docs to be witnessed by a Victorian or NSW registered lawyer, then that's what you'll need to do.

Their legal dept sets the requirements and trying to move a lender's legal dept is like trying to move a mountain 

Cheers,  Paul

Hi Tambo

I'd suggest your first step is to become familiar with the two most popular vendor finance techniques, i.e. Rent To Own (that is a Lease with and Option)  at https://www.propertyinvesting.com/strategies/lease-options  and Instalment Contract at  https://www.propertyinvesting.com/strategies/wraps

Another couple of good spots to get more information on vendor finance are:

http://negative2positive.com.au/info…vendor-finance

http://www.vendorfinancelawyer.com.au/vendor_finance_intro.htm

Cheers,  Paul

Terry is spot on with hat reference if it's established that you're carrying on a business.  However if it's established that you're an 'investor not carrying on a business' then it's worthwhile also having a look at ATO ID 2004/407 at:

http://law.ato.gov.au/atolaw/view.htm?docid=AID/AID2004407/00001

Cheers,  Paul

Along the lines of what Terry is saying above, one of my rules of business, especially in such an emotional market place as residential real estate, is I don't sell our vendor financed properties to friends.

However if it is worth considering selling the property with vendor finance (VF) to a friend, it's worth considering selling the property on the open market with VF.

A couple of good links to get more knowledge of the two VF strategies you mentioned are:

Rent To Own, i.e. a Lease with and Option – https://www.propertyinvesting.com/strategies/lease-options  and

Instalment Contract – https://www.propertyinvesting.com/strategies/wraps

We have a technique where we help to sell properties with VF called negative2positive.  The website at;  http://www.negative2positive.com.au  is a site that promotes our service but it does have a lot of information you could use.

Cheers,  Paul

Hi Mazza

As Freckle says, using a vendor finance Option strategy could also work very well.  Regarding the DA, you would put in all the work and cost of the DA application and the seller, i.e. the Title holder, will authorise (sign) all the DA application paperwork.

A vendor finance savvy solicitor in the NT is:

Vincent Close

Barrister & Solicitor

Unit 39 Metro Building, 21 Cavenagh Street, Darwin NT 0800

GPO Box 3411, Darwin NT 9801

Phone: 08 8941 7055

Email: [email protected]

Cheers,  Paul