Hello,
Is there a wrapping model that would allow someone to offer greater than 70% LVR on commercial property?
Are there any good posts (or more info) on commerical property wraps that I may have missed.
thanks,
Chris
I havent heard of many people that wrap commercial ppty, but it could be done, and may be a lucrative market.
There is nothing to stop you offering hgiher LVRs if you are comforatable with the risk.
Terryw
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Parramatta
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hi caston
i carn’t quite work out your logic
what sort of business would get involved in a wrap????
have you got examples??
harryYeah,
I’m a self-employed call out computer tech and am sick and tired of working from home and not having a decent office/workshop. At the same time I think commercial rents are slavery.
I’m more than happy to work very hard as long as I know it going to end up with me (or me and a partner or partners) owning the building even if it takes about 10-20 or so years.
I would also like to help other self-employed people do the same and setup their business properly so that they can franchise it.
Please contact me if you want to discuss what I am talking about.
thanks,
Chris
1300 722 146hi caston
“At the same time I think commercial rents are slavery.”
as a CP owner i hope an attitude like that doesn’t catch on, otherwise there’ll be nobody to rent our CP’s
wrapping CP’s?
look, there are 2 types of businesses, those that are doing well and those that are struggling.
now obviously you don’t want to wrap with a business that won’t be around in 6 months…do you.
dealing with a successful business is the key…
most success businesses need a partner…..
so my business , and many businesses like mine have a great partner…the BANK.
so what have you got to offer that the bank doesn’t?
better interest rates? NO
allow me to go OD when needed? NO
provide a line of credit? NO
have global investment advisors? NO
etc, etc, etc? NO NO NO
so why, as a businessman would i deal with you?
a good business needs to build a relationship with their bank.
(its a lovely feeling knowing that i can ring the bank asking for 250k for equipment and having the paperwork arrive the next day to sign .No questions. Anything above that has to step up the next level of authority. so it takes another day.)so why’s renting a problem?
my rent represents 3% of my turnover.
most businesses want to put their cash into P&E or products. thats where the money is, not some building chewing up cash.
and eventually when the profits start flowing nicely then’s the time to start looking at buying a CP.
all within structures such as trusts, SMSF etc etc
and the best part, you spend more money on accountants and solictors.
so would i wrap with you?
maybe on the dance floor
but definitely not in business
but good luck with idea
to me, it sounds like petty cash and a lot of headaches.harry
Hi Caston!
I would wrap a commercial property to you (if I had one!) provided my position was secure. You would need to provide me with sufficent deposit and possibly (depends on circumstances) a personal guarantee or caveat over something else of value (possibly your family home – depends on existing LVR/equity).
Provided my position was secure, through some of the items above, I would be less interested in your ‘reported’ cashflow as you have a lot to lose if things go bad.
IMHO the biggest problem with wraps in commercial is that values are more precise than in residential, as more buyers will buy on facts and figures rather than emotion.
Some lenders are now providing Lo-Doc lending on commercial with 20 year terms and no annual reviews.
Another option might be to sub-let a portion of an office from another small business. Perhaps a local accountant or solicitor has a room or corner in their office you could utilise.
Cheers,
GregHarry
I think you miss a few points on wrapping.
It may actually be good for the wrappee to go under after a period of paying. This may mean the wrapper gets to keep the deposit and payments and can re wrap the place.
Wraps are not for everyone. If you can get finance then you would not need to think about being a wrappee. But there are many business out there that cannot get finance for many reasons, such as:
– cannot come up with a high enough deposit
– credit blemishes
– not trading long enough to get conventional finance
etcTerryw
Discover Home Loans
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I have a commercial Real Estate agent here in Brissie who asked me to help him put a package together exactly as been outlined.
The small units where for sale by the developer for $200K each and many of these small businesses could find may 10-15% deposit but not 30% and many had only been trading for 18 months and would not qualify for a tradition com loan.
Think the idea has a lot of merit however in saying that 85% LVR is available through traditional sources in certain cirumstances.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
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