Hi,

The discussion seems to be here that wrapping is about selling over priced houses to people who can’t afford it!

From my experience, this is rarely the case and is counter productive for both the investor (who wants cashflow… what good is a vacant house) and also the purchaser.

The key to a successful deal is to pre-qualify the applicant to ensure s/he can afford the repayments + ownership costs, both now and into the future.

Done correctly, I don’t believe that anyone is being taken for a ride as there is full disclosure of the profit and the risks.

Re price margin: The agreement often lasts for 25+ years, so a small annual capital gain will mean that the property is easily worth more than the contract price. If the gain is higher then the client cashes out early and moves on.

Re: interest margin: a +2% on my loan will still be a lot less than non conforming interest rates, which wouldn’t be available anyway unless the applicant had a 20%+ deposit.

In the end, wrapping is a private finance arrangement, where the underlying security is the property. As such, the interest charged is lower than for personal loans, but higher to reflect the risk to the investor.

No one holds a gun to anyone’s head. Instead, the way to do it (full disclosure), means the buyer goes into the deal armed with far more information than a normal sale.

*sigh* I accept some people execute the strategy poorly, but these are in the minority and I’m trying to work with authorities to tighten the rules to weed them out.

Talk of people being kicked out of homes and left on the streets is a nonsense. There are rights, and these rights are protected on the title to the property.

I advocate that there is a lot of benefit to be had when the stratey is executed properly… and have the evidence in the form of happy clients to prove it.

If you could meet the people who now have a home, and those who have the opportunity, perhaps you’d better understand how it can be used in a way where everyone benefits.

My vote is ‘good’, provided certain circumstances are met, namely affordability checks and full disclosure.

Regards,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

Hi,

Not long ago we went to realestate.com.au with an idea to have some basic financial data collected and then formated in a generic PI.com report.

It’s a work in progress but there is plenty more to do to see it come to fruition.

Personaly, I’d like to see more of the ownership costs outlined to help with the number crunching, plus also info about likely rental.

Great topic of conversation though.

Cheers,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

Hi,

Just a heads up… to be eligible for the free land you usually have to live in the area for a period of time.

Cheers,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

HI,

Thanks for your post and welcome to the forum.

quote:

---

I just ask because it would be good to have a ‘base of operations’ rather than checking a few dozen individual loans / repayments etc.

---

A few years back St. George offered a portfolio loan, which was one facility with a number of sub-loans. In essence this allowed for easy admin by having just the one main account.

Re: question about lending. It comes down to an issue of servicability and risk. Lenders usually allow repayments up to 30ish% of income. The LVR would usually be 80% – perhaps higher in some circumstances, or lower if you are self-employed with no financial track record.

Cheers,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

Hi,

I’m not a big advocator of this approach at all. In fact, I think it stinks.

It sounds good in theory, but it relies on putting in low-ball offers that get accepted on (usually) a 1:100+ ratio.

My time is far too important to go putting in a mass of offers with little or no chance of success. Worse stiil, it will burn the relationship you might build with a real estate agent who actually has to submit the offer and then gets abused for doing a poor job.

You also need to be very careful about signing contracts and pulling out too often. Sooner or later agents will treat you as a tyrekicker. [V]

I recommend a much more direct approach of finding a property you want to buy and then working out a way that you can make money from it by solving problems in a win-win way.

Cheers,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

Hi,

One of the soon to be released additional features of this site is a system whereby people who know of deals can advertise them within strict guidelines which includes giving an initial outline of the numbers.

This is will be a paid service (something nominal, say $20 per deal) for the person submitting the advertisment. Alternatively people can subscribe (another nominal quartely fee) for a priority access service where they are notified every time a new deal is posted to the site.

I hope to have this released by the end of the month.

Stay tuned for more info…

Bye,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

Hi,

quote:

---

P.S. The rest of this message has been self-censored (to save you the time of doing it).

---

See Bec, I knew you could actually adhere to the rules if you set your mind to it.

Now, having done the interview I can tell you on good authority that the aim of the MAP was to control $1m in property (and not to make someone a millionaire) within 12 months. This was said on camera and broadcast as said.

As for getting away, or not getting away, with anything… let’s just wait the required 12 months and see what happens.

Now, pertaining to your comment about deleting posts etc… I’m not fussed by your criticism… far greater minds have had much better things to be critical of.

I simply reject any posts made by you (or anyone else) that are in what the average reader might would deem as bad faith.

As the owner of this site and one of the moderators, I guess I set the tone and if you don’t like the editorial policy then… start up your own forum and do what you like.

Until then – live by the rules or don’t post.

Bye,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

No advertising please.

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

Hi Mike,

The new site to be released shortly will have a google search function that can be used on the entire site.

The engine that Snitz uses seems a little clunky, but then again we do have a massive database.

Cheers,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********

Hi,

You talk… we listen!

Cheers,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********