All Topics / Creative Investing / Wraps and 2nd mortgages

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  • Profile photo of moonscapemoonscape
    Member
    @moonscape
    Join Date: 2004
    Post Count: 9

    Hi
    I’m like a previous forum member wanting to know more about wraps before committing to purchasing a wrap kit. Can anyone tell me how wrap finance is secured as I suspect the Title Deeds would be transfered into the purchasers name (my wrap client).I can only think that a ‘Deed of Agreement’ is formally made between both parties that gives the wrapper the authority to foreclose if a wrapee fails to make payments.
    Can someone clarify this?
    cheers

    Profile photo of Paul DobsonPaul Dobson
    Participant
    @pauldobson
    Join Date: 2003
    Post Count: 1,196

    Hi Peter

    I believe you’ll get most of the answers you’re looking for at:
    https://www.propertyinvesting.com/strategies/wraps.html
    and
    http://www.businesslawyer.com.au/fr_property.html

    I hope this helps.

    Cheers, Paul

    Paul Dobson | Vendor Finance Institute
    http://www.vendorfinanceinstitute.com.au
    Email Me | Phone Me

    An alternative way to finance your home.

    Profile photo of moonscapemoonscape
    Member
    @moonscape
    Join Date: 2004
    Post Count: 9

    Hi Paul
    Thanks for your reply.
    I have read the websites you suggested and I am still confused as to how you secure your interests in a wrap property.I can only assume that the property title does not transfer to the wrapee(the client) until all installments have been paid and that somewhere in an agreement the wrapee becomes responsible for the rates and maintenance etc.during the course of the agreement.
    Can anyone else clarifythese points,
    Thanks

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    That’s it. The title is in the vendor’s name until settlement. This only occurs when the last payment has been made.

    Terryw
    Discover Home Loans
    Mortgage Broker
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Paul DobsonPaul Dobson
    Participant
    @pauldobson
    Join Date: 2003
    Post Count: 1,196

    Hi Peter

    As Terry said, that’s it. An Instalment Contract (Wrap) is based on a normal real estate Contract of Sale. This “normal” contract has about 13 pages of special conditions added which, among other things:
    1. Specify that “completion will take place in, eg 25 years. Therefore the title stays in the wrappers name until completion in 25 years or until your wrappee refinances into a “traditional” mortgage. I aim to have our wrappeees refinance within 1 to 4 years.
    2. Allows the wrappees to occupy the property prior to completion.
    3. Makes the wrappees responsible for all ongoing costs of the property, including maintenance, rates, insurances, etc

    There are many other special clauses in the 13 or so pages and I know sample contracts are provided with Rick’s kit. Of course, if you are in NSW and use Tony Cordato they are supplied as part of Tony’s service.

    I believe all your questions will be answered (as ours were) when you buy either Steve’s or Rick’s Wrap Kit/Pack.

    I hope this helps.

    Cheers, Paul

    Paul Dobson | Vendor Finance Institute
    http://www.vendorfinanceinstitute.com.au
    Email Me | Phone Me

    An alternative way to finance your home.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Tony Cordato once explained it to me in an easy to understand way. Just think of selling a house on a 42 day settlement. This is what usually happens. Now extend this 42 days to 30 years, with the added condition that the new owners may live in the house during this time, as long as they start paying for the house in installments.

    Terryw
    Discover Home Loans
    Mortgage Broker
    North Sydney
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of moonscapemoonscape
    Member
    @moonscape
    Join Date: 2004
    Post Count: 9

    Thanks Terryw and PaulDobson
    Your replies were great I appreciate the time you spent
    Many Thanks

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Peter

    Hopefully you have had your questions answered but feel free to email me if you need any further specific advise on wrapping.

    Cheers Richard
    richard at castlewhite.com.au
    Email me for details of our Qld wrap service.

    Richard Taylor | Australia's leading private lender

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