ve been doing plenty of reading and research lately and my eventual aim is to own enough properties that I have enough income stream from them that I no longer have to work.
I’m looking at the basic numbers to get started – I can see how lenders would lend me for the first, second and even third property, but with my income remaining the same – would they not see more further property purchases as over extending myself?
I’m not confident (or experienced enough) to look at wraps yet, but am very interested in others experience with fourth, fifth, sixth properties and whether the lenders felt you couldn’t service the loan.
Thank you
RLIt would also depend on your rents and other incomes. When I started investing I obtained 6 x 95% loans for investment properties within 6 months before the bank got a bit worried. Then I just went to a different bank.
Terryw
Discover Home Loans
Parramatta
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Same as Terry. When we started wrapping we thought the pin would be pulled on 20 deals or so.
You would be suprised when the equity position looks good and the lender sees a good stream of income coming in they bend the rules and keep the loans coming.
+ cash flow enabled us to reach at our peak as a Company 176 wraps which is down to around 111 now. These are only with 2 lenders so don’t ever feel trapped.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner.
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Hi guys
We are very new to the IP game – have just bought our first and looking at our second now. Could someone please explain what is a ‘wrap’ or ‘wrapping’
Thanks
Paul
Wrapping is the process of purchasing a property and then onselling it to someone else at a higher price and interest rate but my accepting repayment of the purchase price by way of a series of installments (often 300 – 25 year loan) on which an interest rate is charged.
EG.
You buy a house for $100K and borrow $80K from your Bank and get charged 7% on the interest.
You onsell the property for $130K and the purchaser pays you interest at say 9.25%.
As the rate of interest you are receiving is on a higher loan balance than the one you are paying then you receive the positive cash flow each month.Build up a few and the cash flow can be enormous.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner.
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
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