Hi all,
I am sure i am not the only one out there that is wondering which strategy to use first!
Can anyone with the experience outline the pros and cons of both wraps and hold when first starting out?
To Mr Mcknight, this is a great website. The functionality is awesome!!
Thank you!
quote:
“Your greatest asset is your mind, so let it do your thinking, not your emotions”Greetings!
Thanks for your feedback about the site. We are always on the improve and will shortly look to further upgrade the forum and backend database… so stay tuned for further developments inthe near future.
Pros and Cons of wrapping hey?
The disadvantages are that you are selling the property so one day you will be cashed out… that is, the deal does not go on forever.
You are also precluded in a wrap from refinancing or selling the property, so to a large extent you are locked in to the deal for the term of the contract.
Advantages:
The big advantage is that you can reduce your cash needed by receiving back a deposit from the wrap client. This means your cash on cash return will be better and it’s possible to do no / low down deals.
There is a fair bit of work to set the deal up, but once you have then you can sit back and enjoy the cashflow.
In reality wraps are just one of many ways to make money in real estate. I advocate putting many tools in your property tool kit, which means finding a problem and then matching it with the right strategic solution.
Not all properties lend themselves to be wrapped.
Bye
Steve McKnight
**********
Remember that success comes from doing things differently.
**********Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Thanx Steve,
I am currently doing a lot of research to get my tool kit as well equipped as possible for the times i need it.
However, should i be focusing more on equity rather than cashflow when starting out?
I have a complicated question that might seem silly but i am unsure. Can you use a flip strategy and then finance the new buyer by wrapping or do u have to officially own the property first?
thanx for your feedback once again!!!
“Do what your hart thinks as u will be criticised either way”
Harryson
This may well vary from state to state, but in Victoria you must settle the property before you can wrap it.
That means you can always settle a property in the morning and have your wrap buyer settle in the afternoon, but you still need the money available to settle in the first place. In flips you usually pass the deal on before settlement so you don’t need the funds to settle.Keep smiling
Felicity
Hey there,
i thought as much but i thought i would ask. Thanx for your feedback and help, much appreciated!!
One question tho, Wot tax act does wrapping come under? Is it income tax? Can u minimise the tax expenses buy sheltering it through trusts or/companies companies when using wraps?
Thanx again
Keep hunting!!
“Be proactive rather than reactive when making financial decisions”
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