Hi Guys,
Here’s a situation that needs some lateral thinking…
Have a property I wrapped some years back and all is well.
The two people who bought it now want to do different things in life.
Person A tlks about refinancing out and keeping the house
Person B wants to sell up, take the profit and move on.
They owe about $110k on a property they bought for $130k, which is now worth around $180k – so there is a fair bit of equity for them to split.
Person A should be able to get the finance but has been “dragging the chain” for about 6 months and Person B is getting really frustrated as he wants to move on.
My preference is to be paid out so i can move onto my next purchase.
Anybody got any ideas on how we can all get what we want?
Thanks
JB
John Blackburn
http://www.propertybooks.com.auYou could ‘buy them out’ by terminating their contract. Depending on which state you are in, they may avoid stamp duty, and you get the property back – with the need to pay stamp duty again on a new purchase, plus you get a slight discount.
Terryw
Discover Home Loans
Parramatta
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi
What is the main issue here? the fact that you want out or the fact that they are indecisive? Answering these questions should make the way forward for you a bit clearer.
Either you let them get on with it or you terminate the contract. If it is your wrap and my understanding of wraps is limited then surely you control the situation?
Warm Regards
SueMIT | Owen Real Estate
Email MeOriginally posted by manofaction:Have a property I wrapped some years back and all is well.
Hello manofaction
Surely you can’t terminate the wrap if they are paying on time ?. The fact that they are having a difference of opinion is not your business unless they are in breach of contract. i.e not paying off their loan with you or neglecting the property.
Having said that it seems as if person A is the road block so if you really want to “stimulate” her/him to action you first need to work out why they are “dragging the chain”.
Have you any idea why?
Is it possible that person A is not really financially literate and has just put the problem into the “too hard” basket?
Or maybe they are afraid that they can’t really afford the property on their own? After all, they need to refinance for at least $145K and probably more to cover stamp duty, conveyencing etc. plus then needing to be able to pay all the costs of the property instead of just half.
You may be able to help with this by calculating it all out for them.
Cheers [smiling]
ElkaThanks guys,
I’ll go thru some of the responses;
Terry;
You could ‘buy them out’ by terminating their contract.As they are complying with all terms of the agreement, there is no reason to terminate.
Sue:
What is the main issue here? the fact that you want out or the fact that they are indecisive?.Yes, the indecision by one is creating some “static” but livable static.
Either you let them get on with it or you terminate the contract. If it is your wrap and my understanding of wraps is limited then surely you control the situation?See earlier comment above.
Elka;
Or maybe they are afraid that they can’t really afford the property on their own? After all, they need to refinance for at least $145K and probably more to cover stamp duty, conveyencing etc. plus then needing to be able to pay all the costs of the property instead of just half.The payout is a bit under $110k, plus a small amount for stamp duty.
Person A can afford the repts on his own… easily.
Don’t know why he is reluctant to move to where he wants, but obviously there is something he’s not sharing with us all.
Anyway, the main reason for wanting to see this one finalised is so that Person B can take his “profit” and move on with his life, whatever that be.
So whilst I am happy to let it run, I would like to see Person B get what he wants, Person A get what he wants, and of course it frees me up to do another investment elsewhere.
The prob remains that Person A is holding it all up unless we can come up with some lateral thinking.
John Blackburn
http://www.propertybooks.com.auG’day John
We’ve been successful in refinancing peole out of our wraps by offering a zero cost refinance to them. We had plenty of profit in the transaction so the cost was relatively small and gave us access to our profit. We did however insist that this was a once only, not to be repeated, promotion that had to be taken up in 4 weeks from notification.
We only had to do this for a number of our early wraps where we hadn’t built two to three year interest rate honeymoon periods into the Instalment Contract.
Also, we’re in NSW so Stamp Duty is paid going into the wrap by the wrapees. As you’re in Vic, I guess you’d have to exclude the Stamp Duty cost from the “free” promotion.
Good luck.
Cheers, Paul
Paul & Karen Dobson
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John
I didn’t really mean terminate, but mutually agree to rescind the contract. You can them pay them a sum of money, you get the property back for under market value, and don’t need to worry about paying stamp duty etc on a new property, and they still make a CG based on the original price.
Terryw
Discover Home Loans
Parramatta
[email protected]
Sign up to my mailing list.
Just send me a blank email, with “subscribe†in subject line.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terry,
That is one option.
The prob is one guy would accept as he wants to take his money and run, the other wants to stay.
Still, it’s a good wrap, so it’s just a matter of time to see what happens.
Thank every one.
John Blackburn
http://www.propertybooks.com.au
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