Hello
Would you please help me with several issues?
Firstly, how is the balloon payment calculated when it comes to doing wraps? What’s a Loan Amortisation Schedule? Where do I get the software required to calculate the Balloon payout figure? etc, etc, etc… Could someone please help me?
Secondly, knowing that your wrap purchaser meets all of the refinance criteria, how do you get them to cash you out?
That’s all for now. I really appreciate your help with these issues and I am sure that someone else out there also appreciates the advice that you have provided.
Cheers
-Nathan Danker
Hi Nathan
Have a look at;
http://www.mortgageworldaustralia.com.au/calculators/amortisation_calculator2.htm
The result is a loan amortisation schedule.Do you mind me asking why you are considering a balloon payment with your wrap transaction?
Cheers, Paul
Paul & Karen Dobson
negative2positive
Turn your negatively geared property into positive cashflow.
Phone: (02) 4984 9540Talk to us about Wrap Training Joint Ventures.
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Hi Paul.
You really are a helpful fellow, aren’t you?
Well, the reason why I want to have only short 4(hopefully) year wrap contracts is because I want to move solely into the buy and hold market.
By getting my Cashflow up in this early stage will provide me with enough cashflow to purchase more and more buy and hold ip.
Then I want to pay the debt on them down a bit so that my position is secure and the positive cashflow from the buy and holds covers everything and then some. Once that is all done I would like to settle down and get married and live happily ever after.Paul, I may still need help with that wrap jv.
I’m weighing it up. I’ll give it a go. I’m kind of half way at the moment.Also, I looked at the link that you provided which helps one to determine what the Balloon payout would be. It is fantastic.
In Steves Wrap Kit on page 9 his example has payments that are made weekly, whilst Mortgage World Australia’s calculator only enables one to calculate monthly. What software (or site) would Steve use to generate his Loan Amortisation Schedules?Cheers for everything Paul
-Nathan
Hi Nathan
We plan for our wrapees to be refinancing out of our loan at the end of year two or, at a maximum, year three and we don’t use short term contracts with attached balloon payments to do it.
Your potential clients are mostly people who have been locked out of having a family home. I doubt that they’d respond to well to an offer of a 4 year loan, followed by a pretty large balloon payment.
Knowing that there are now traditional lenders out there that want to take your wrapees off you, after they’ve been with you for a couple of years, this is how we do it.
We make our potential wrapees feel comfortable that they have got a 30 year loan but we also educate them right from the begining that we’ll be looking to refinance them into a traditional loan at the end of year two so they can get the title into their own names.
We also tell them that the interest rate will increase by one percent in years 3, 4 and 5 to help to ensure that they make this move into a traditional loan. When you tell them up front, in the begining, all our wrapees have been happy with the plan and are keen for the end of the second year to roll around.
I hope this helps.
Cheers, Paul
Paul & Karen Dobson
negative2positive
Turn your negatively geared property into positive cashflow.
Phone: (02) 4984 9540Talk to us about Wrap Training Joint Ventures.
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
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