Developer offloads property through a barter exchange (eg Bartercard) Accepts 30% deposit of trade dollars. Barter Exchange company lends the 30% trade dollars via an unsecured line of credit (interest free). Bank loans 80% LVR for balance secured against said property. 10% cash difference covers legals, tax and setup fees etc.
Purchase price qualified by independent valuation.Any opinions, views or experiences from anyone?
Check the asking price against comparable properties yourself so you are not solely relying on the valuation.
Which development/area/state are you referring to?
Luke Woollard
Licensee
Pacific Lifestyle Property
http://www.plproperty.com.aucomments made are general information only. you should seek professional advice for your particular circumstances.
mitm
Yes been there done that as the developer. One issue is getting rid of your Barter Dollars to your trade suppliers and sub contractors.
Anyone who takes it charges you maximum retail price so no trade discount.
Also a lot of them only take a small percentage of trade and the balance in hard cash or cheque. As the ATO consider a Barter dollar as a real dollar who still pay tax and GST on the transaction.
Considering there is a secondary market for Barter Dollars (You can buy them for around 47 cents to a Barter Dollar)somebody has to be the looser.
Also i would check the property value out very carefully if i was getting the Vendor to take BarterDollars as most are over valued or you could have made an offer and saved off the purchase price.
With regards to an independant valuation i think we have all been there. You can get 3 different valuations and get 3 different answers – all independant.
Cheers Richard [email protected]
http://www.yourstatefinance.com
Development Finance & US Finance our speciality.Richard Taylor | Australia's leading private lender
Thanks for your replies.
Subject area is Gold Coast, and Cabarita NSW.I like the idea of buying T$ for cash at a discount. How would you go about that – direct from the Trade Exchange or from trade members?
Certainly the Trade Exchanges would never admit their is a secondary market and would condone such activity.
However i can tell you it is alive and well. Try and contact someone who consider is holding either a large amount of Trade Dollars and is keen to offload or alternatviely a very small amount of Trade Dollars too small to make it worth their while in using them.
Cheers Richard [email protected]
http://www.yourstatefinance.com
Development Finance & US Finance our speciality.Richard Taylor | Australia's leading private lender
Hi All,
I have bought 3 residential props and 2 retirement units using Barter $ as deposits.
From my experience alot of Bartercard properties appear to be very very expensive. You need to get your own vals.
I am a trader of Barter $ thru my business (automotive) to purchase goods (at top price) but I also get extra jobs for top dollar. I find that Barter has helped my business and property investing.
Also, I use barter $ for all property legal matters.
Using Barter $ for a deposit is a great way to get into property investing and when you sell you get cash back for your Trade $..For the 2 retirement units I had insufficient Trade $ so they gave an interest free loan of what I needed ($50K Trade). no fees, no time limit on when I pay back.
There are several Barter mobs, Bartercard, Ebanc Trade, BBX (about to be listed on the ASX) to mention a few. Bartercard is listed on the London Stock exchange.
Yes I have heard that u can purchase Trade $ for low cost but this is frowed upon by the Trade Exchanges.
My thoughts are that as the going gets tougher there will be more Barter deals around at reasonable prices.[biggrin]
PS You can check out their property listings on their web sites
hrm
Interesting to hear hmackay’s post about buying props with barter $$ -there may be a positive to these systems after all?
All I can say is that I had a bad experience with Bartercard and wouldnt suggest anyone get involved with them, especially a small business. I wont get into the details here, but be careful.
Dev * [kid]
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