Forum Replies Created
If your looking at buying these using lease options, the short answer is yes. Generally though if the Writ of Possession has been issued then its too late.
Dave
Hi Brad,
Your basically got it. You get a house that needs a reno. This does not generally include structure work as Mums and Dads cant do this work themselves.
The one that was done on Hot Property was bought at a cost of 285. It was estimated the work would cost 35k or so.
The buyers were offered the house at 340 and would be given a "sweat equity" credit as deposit for the 35k, making the buy price 305k.
The scope of work needed was decided on by the new buyers and the prospective buyers gave their input as how long they would take to do the work. They got a valuer to value the house on the assumption the works would be completed. The valuer said it would be worth 340 once the reno was finished.
The buyer completed the work on the house in the 6 weeks (they set the time time frame) and a valuation was done again.
The house valued to a round 355k and they got their own bank loan and paid out the seller (Rick Otton) the 305k.Yes he could have put them on an installment contract or a Rent to Buy for the 305k to make positive cashflow as well.
Dave
A Rent to Buy is a description of a paperwork system used to buy and sell property. The Payment is actually a payment made to the seller to buy the property over a period of time. The payment is similar in structure to a loan payment. That is part Principle and part interest, but with a rent to buy the payment is made up of the bit that comes off the balance owing and the bit that does not. At the end of that time you would have a balance owing and would get a loan and pay out the seller. Its a great way to get into a house and pay some of it off as you go. The good part is the Lenders usually look at it a savings record for the bit that comes off the price. Under the rent to own the seller still looks after the outgoings.
The idea is you get in and are paying off your own home.
Dave
I use your product for P+I but have to use the excel sheet for IO and Honeymoon rates.
I would like to see these options in your product.
Dave Siacci
I found this article very good reading. It points out very clearly (to me in particular) that you must do your due diligence on your potential client. You must ensure you check that they are able to meet thier repayments. You cannot just put anybody into a vendor finance contract and think “she’ll be right”. You have an obligation to do the right thing. I like to operate with a view to help the purchaser achive home ownership. If they are borderline say “NO”.
Dave Siacci
I use Rent Manager for my rentals, a combination of Loan Alert and Excel for my wraps and Excel for 2nd mortgage carry backs.
Dave Siacci
Rick Ottonn still sells his wrap pack. I have used his metod for 4 years now and have done well.
Dave Siacci
the best place to start would be in the local paper classifieds for the areas you want live. Most vendor finance homes are advertised this way.
Furher to the comment by “Nat R”, you should not read and reply to posts that require the skills and brains required to make an educated and informed comment ouside your area of comfort. Not all people can get a home loan at the same time they want a home. It is not always as simple as “Go get a loan for 106%”. There are a lot of people who just cannot get the loan at all. Who are you to judge that they then are not allowed to own thier own home.
Have you considered the possibility of buying on a lease option?This way you don’t need to rely on the banks…just to get started!The second possibility is to do a joint venture with someone who does have a job and a deposit but not the time or the knowledge to do their first investment.You share the profits giving you the chance to be in the market and provide the time you need to meet bank criteria for your first loan.
To the best of my knowledge NO.The advertised price should be GST incusive. You dont pay it the builder does.
Dave
No you are not considered an approved agent. You need to get them to sign the FHOG docs, provide photo copies of Photograhic ID eg licence, a stat dec signed by yourself saying they have taken possession of the property and a bill with their name and new address on it. Put it all in an envelope and post it to the State Revenue Office. Takes about 14 to 28 days.
Dave Siacci
The security for the loan must be stand alone. If you want to use capital gains from another property you own you will need to extend that loan, draw the money in cash and use it for the property you intend to wrap.
David Siacci
Vendor wraps association website at http://www.financewraps.asn.au/
Dave Siacci
Keep in mind that you can not cross securitise the the loans for a wrap property. It must be a stand alone financial arrangement. (In Victoria anyway)
Dave Siacci
RE MortgageHunter
In some cases brokers commission is based on the size of the loan they write. Cross collateralising gives them a bigger loan as they can include all properties they can. Happened to us. Westpac actually redid all the loans back to stand alones 2 months later. The manager at the bank told me about the commission set up. It comes down to fees and commissions!!!!The amount you add to the price of the house is dependant on the price you paid and the exit strategy you have for your buyers. If you plan to have them refinance sooner rather than later then the sales price needs to be lower (very close to market value). As far as intrest rate goes you can charge upto a 2% or more if the funds you have for your mortgage are low but if your funds are dearer then 1-1.5% maybe more realistic.
Dave Siacci
Just to work out the payment many banks have calculators for this on thier websites. If you plan to do a few wraps then Loan Alert is a program designed to track your purchasers loan. Check out the demo version before you decide to buy at http://www.loanalert.com.au . We have found it quite useful.
Dave Siacci
Lease option it to some yuppy with high income and low net worth. Charge a premium for the unit on price but get excellent cashflow along the way. Make the payment high enough that they can refinance within a few years . Otherwise finance them the 10% deposit at a reasonable interest rate on an unregistered second mortgage(and caveat) for say 3-5 years. Or offer to pay the first 12 months interest on thier loan (just add it to the price). Just a few ideas.
Dave Siacci
You can off set the loss against any future capital gains. The loss carries over. Why dont you consider selling it on a wrap or lease option instead. You could then sell it for what it owes you and have cashflow till the tennantpurchaser refinances. Beats a loss.
Dave siacci
Maybe you could get them to finance you the deposit amount you need.
Dave Siacci
