Hi,

Thanks for the response.

Basically the exit side of the wrap is negotiable at maturity depending on FMV at that time.

I am assuming that all components of the wrap are flexible ie. maturity date, interest rate, sale price.

Can the interest rate to the wrappee be altered midway thru’ the wrap if the wrappers IP loan rate has risen? I am…[Read more]

Hi all,

Would a good reason for someone to hand over control of their property be :

1. Bank is about to foreclose. By optioning the property at current MV, the owner has a better chance of receiving any equity in the property but 2 years down the track and the bank is happy as the loan is being paid.

2. If owner has maxed out LVR and needs to…[Read more]

Hi insider,

Yes, this is what I am trying to establish. the whole point to property trading whether it be thru’ L/O sandwich’s or wrapping is to have a win/win/win situation.

Personally I see L/O sandwich’s as the way to go for the property trader as your working capital and loan liabilities are nowhere near as large on a property to property…[Read more]

Hi Terryw,

Please correct me if I’m wrong, but isn’t the whole point of marking up the interest rate to the wrappee to give you immediate weekly cashflow through paying your loan installment and keeping the mark up difference?

When the sale goes thru’ the total mark up difference you received during the contract period is deducted from the sale…[Read more]

Thanks everyone for your input.Some good insight.

Let me put my question this way:

If I had 30K cash to begin with how do I begin buying 1 house a month starting today? My goal is cashflow in the first 3 years.

Can it be done without cross collatorisation (did I spell that correctly?)and using 100% IO loans with the desposit of the buyer paying…[Read more]

Hi Mathew,

No offence taken. It is always difficult to put things in words and have another person understand the intent particularly when you are a novice like me.

OK. I see that there is a rule of thumb happening here regarding the option premium I would pay for a property.

Is the premium calculated based on a percentage of what would be…[Read more]

Thanks Terryw for the input.

I thought this was the case.

As with any business you need to understand the thinking of your customers in order to service them effecively. I think what is attracting me to L/O sandwich investing is the ability to solve alot of peoples problems and profit from doing a good deed.

So with sandwich L/O trades who is…[Read more]

Hi willi,

Thanks for your imput.

With a sandwich L/O trade (please anyone correct me if I’m wrong) there is the seller who owns the title of the property, the buyer who wants to own the title but can’t obtain finance for what ever reason and the investor in the middle profiting from bringing the two together and eventually moving the property…[Read more]

Hi Willi,

I am in the process of evaluating the virtues of lease option sandwich’s. The only challenge I have is figuring out why someone would give me control of their property for say 2 years if the reason they had was to sell the house immediately without attracting agent fees and retain max equity.

However, they would need to vacate the…[Read more]

Hi Mathew,

I am trying to understand why someone would hand over control of their property to me as part of my sandwich trade given they will only receive maybe 1K straight up from me as my option premium and not receive any benefit from the property for a couple of years until the trade is exercised. [xx(]

Hi all,

Would this be a fair approach :

1. borrow 80% put down 20% from own pocket either from primary residence equity or cash. Lock in 1st IP.

2. Wrap this property with wrappee who has maybe 5% deposit towards the value of your next IP.

3. borrow 95% IO loan towards next IP. Capitalize the MI. This loan is essentially a 100% finance.

4.…[Read more]

Hi Steve,

What is a small amount of money?

I have roughly 160K equity in my home and maybe 10K cash (savings not disposable). My income just covers my expenses comfortably.

Is this a good position to begin creating 1 deal a month? [?]