Neil Jenman has another (negative) article on wraps on his website:
http://www.jenman.com/NewsNews1.php?id=349A recent decision by the Consumer, Trader and Tenancy Tribunal [NSW],………….
Also mentions Steve McKnight
Terryw
Discover Home Loans
Parramatta
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Terry
Another great piece of Jenman journalism.
Funny he was never like that when i drew up the Contract to buy a block of units off his parent in Hamilton Qld in 1998.
He couldn’t even be bothered to comply with the terms of the sale which stimpulated that the Vendor was responsible for serving notices on the tenants to leave. Due to this we almost terminated and sued his parents for Specific Performance.
Cheers Richard
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Richard Taylor | Australia's leading private lender
Hi Richard
Yes, it is an interesting bit. It is funny how he managed to drag Steve’s name into it. (not funny for Steve tho).
This is a link to the case:
http://www.austlii.edu.au/cgi-bin/disp.pl/au/cases/nsw/NSWCTTT/2005/481.html?query=%22a%22+and+%22feeling%22+and+%22of%22+and+%22unease%22+and+%22and%22+and+%22on%22It makes itneresting reading.
Terryw
Discover Home Loans
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Terry
Appreciate that will read it later.
Must admit in 9 years we have never been in his wrath. I guess if you never do anything wrong it is difficult to have a go at you.
Cheers Richard
Ph: 07 3720 1888
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Richard Taylor | Australia's leading private lender
anyone know the reason it was found to be unjust?
What was wrong with the contract?
We buy properties in Adelaide. Immediate Cash Settlements, No Agent Fees.
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phone 0412 437 582I just had a scan of the case online and it looks like the judge ruled the applicants should never have been approved.
The interest rate was 9.2%. House price was $200k – but I couldn’t see what it was bought for orginally.
Craig
It would have nothing to do with the whether the clients should have been approved or not originally but more to do with the fact then they appeared to retain no interest in the installments paid.
Cheers Richard
Ph: 07 3720 1888
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http://www.yourstatefinance.comSpecialising in US & IP finance.
Richard Taylor | Australia's leading private lender
anyone know the reason it was found to be unjust?Xenia,
It appears from reading the text that the Senior member of the tribunal found it unjust that the nominal rent from the property was $ 215 p.w., and yet the wrappers were extracting $ 1,700 p.c.m. or thereabouts for the prop…with no prospect of ownership of title, even if the applicant stumbled on repayment # 299.
It also appears that despite having tomes of paperwork on both the property and the wrap contract, the wrapper had not a jot of supportive evidence of the wrappee’s ability to pay.
It looks as if the ol’ maxim of if the yield is too low on a prop, simply zip in there and wrap it doesn’t quite cut the mustard.
Having never been involved with wraps and no intention to chase this trail…my opinion on this matter ain’t worth squat..
Hi Terry, This is a postive article; he says its good news for buyers which looks true – not sure that st eve would say a buyer not paying is an opportunity. Surely not? Id challenge him on that if i was ste ve.
And, Richard, you bought units from his parent and the parent did the wrong thing? This makes Neil Jeman bad??!! Surely, we can find something on him worse than what his parent did 8 years ago.
Come on lets get the anonymous posts going again because this latest article of his could do lots of harm to you and all the other rappers.
Off to work now. Gotta loan to pay.
Leo
And a bank loan to!
Leo
Sorry how could this have an effect on my wrap business.
If you do nothing wrong then you have nothing to worry about.
All of our clients over 9 years have located their own properties and come to us with the deal so they have always been sware of what the original asking price was.
They receive a letter of oofer from us advising them what they can go upto in the way of a purchase price and if they proceed they get a letter advising them what the onsale price will be.
They all require independant legal advice and out Contracts include a declaration to be signed by their lawyer or alternatively they sign to waive their rights to independant legal advice.
All Contracts are UCCC complient. In the event of possession the accrued equity after costs and charges incurred is returned to the wrappee.
I am at loss as why wrapping is now in threat but perhaps you could enlighten me further.
Cheers Richard
Ph: 07 3720 1888
[email protected]
http://www.yourstatefinance.comSpecialising in US & IP finance.
Richard Taylor | Australia's leading private lender
Wow what happens if the LAW says that all wrap deals are retospective … i would c..p myself … any way when you front the judge the truth will come forward …
resiwealth – defining the financial target
I totally agree with the Tribunal. The WRAP is unjust — I have made this comment on another similar thread.
Investment is a fair play which is sustainable. The whole wrap setup was a trap for those taking the contract. As the promoter for this method (Steve McKnight in his book), he should be shamed for promoting such things.
A fair play is a MUST.
Richard
You have NOT given one word of reply to my question about why you use Jenman’s parent to criticise him.
Please tell me how Jenman has done sometghing wrong because of something a parent may have done when you bought from the parent 8 years ago.
Thanks
Leo
ilearner
How ill informed you are.
Do you really understand the mechanics involved in establishing an installment contract or License to Occupy.Do you really think companies such as General Electric (One of the largest companies in the World) and their associated Financial arms should also be SHAMED for charging clients 27% PA on products marketed as interest free or the 13.5% they charge (secured) for clients who happen not to be able to verify their income and have been discharged from bankrupcy.
Grow up – as many previous posts have pointed out the Tribunal found in the favour of the purchaser rightly on the basis that from the payments being made they had little chance of ever owning the home.
Next thing you are going to tell me that those 106% lenders who charge 1.5% over the SVR are also unfair.
If the client receives independant legal advice and the terms of the IC are transparent and just surely the purchse would have little to complain about then.
As a company we currently have on our books over 180 happy wrappees from who we get regular letter of thanks and xmas cards from thanking us for putting them into a home and giving them a chance. They were all aware of how much the home was originally for sale for and understand from our letter of offer than we are also running a commercial business.
Cheers Richard
Ph: 07 3720 1888
[email protected]
http://www.yourstatefinance.comSpecialising in US & IP finance.
Richard Taylor | Australia's leading private lender
ilearner,
Heres a little story. I knew some people who were offered a wrap for a place they rented back in the 1986. It was in a suburb called Newport in NSW.
They declined (although it was a good price).
Just recently the house sold for $1.65 Million.
Let me repeat that $1.65 MILLION.Yes the price was a tad high compared to other houses and yes the intrest rate was three percent higher. But in that 20yr period has risen (from the orignal pirce) 700%. Meaning a return of 35% per yr.
Yes waps are so bad…. they could of given this a family a home, stability and security. Instead this family have never owned a property and have lived in rented properties with little stability for ever (they still live in rental properties).
Now this faimily has basically no assets.It is uninformed opinons, ilearner, that have more than hindered and certainly not helped. There are more than enough success stories regarding wraps to show that they can help a number of people who would not get finance from a bank (or the interest rate would be higher than a wrap).
Hellman
Hellman,
Sorry to be pedantic…but a 700% rise in 20 years is actually only 10.2% p.a. compounded.
If it was 35% p.a., it would have gone up 404 times….OK ??
Your right. I was comparing it to the price they could of bought it at to now (thats why I put in “(from the orignal pirce)”, but perhaps I should re worded it somehow….)… Actually I thought the were offered it for a certain price, but actually it was much lower… over 800% (Dazz – u can work it out per yr, thx. mate [biggrin]).
But in the end it dosn’t really matter. What matters is that wraps can work and there is viable proof (well that was what I was trying to suggest).
hellman
800% bumps it up to a massive 10.95% over 20 years….not that much different really.
That’s about 11%, which is what good property does over the long haul….as we’d all expect.
Hi,
just sent a comment to Jenman (see below):Good afternoon,
just wanted to know if the “wrap Contract” in question is one from Steve McKnight or another “home-made” job. Was the Wrapee not able to put a caveat on the property to secure themselves at least a little bit? We are wrapees and are very happy – yes we pay more, but recently we gained some CG in the market rise so it isn’t all bad.Interested in your comment
Let’s see what happens. Sometimes I like stirring too…[cap]
Cheers
C@34Our greatest weakness lies in giving up. The most certain way to succeed is to always try something one more time.
– Thomas EdisonGreat question C@34, can’t wait to see the reply!
How does running a wrap business differ from running any other business?
You could argue that they are all unethical. Why does McDonalds exist? The nutritional value of their food is low compared to eating raw broccoli! People could live longer if they were offered raw veggies instead of burgers and fries!
It exists because it has Tapped into a market! It gives the market what they want, easy meal solutions. We buy their food because it is convenient even though we could all do a better job cooking at home!A wrap business exists for the same reason! Because it has tapped into an existing market! Richard is right in saying that there are alot of happy wrappees, people provide this sevice because there is a market out there that wants it!
Richard, how many phone calls do you get if you advertise a house on vendor finance terms, >500 calls per week I bet, there is a strong market for is!!!!
This particular wrapper got in trouble because he got things wrong! Lets not start blaming every single person that offers vendor finance for the actions of one individual!
Some of us actually do the right thing and offer nothing more than win/win solutions! It’s unfair to label everyone the same!
We buy properties in Adelaide. Immediate Cash Settlements, No Agent Fees.
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