Vendor Financing as Investing Strategy

Hi matt

Absolutely agree that many sellers have very traditional attitudes to selling their properties but, so far today, I've had two landlords ring me, interested in selling their poor performing IP's in St. Kilda East, Vic and The Entrance, NSW.

With capital gain as it currently is, we're getting three to four of these enquiries per week.

Cheers,  Paul

Hi Dkb87

That's how we started, i.e. we had some equity in our home and we bought some properties and on-sold them with vendor finance (VF).  However it didn't take us long to realise that we were just setting up a cash flow business.

We always believed that our long term wealth would come from the equity we own in property.  So, initially, we used this positive VF cash flow to support our buy and hold portfolio building.  It was later, as the cash flow accelerated that we were able to use the cash flow to support our buy & holds and our lifestyle.

Cheers,  Paul

Hi Dkb87

Your situation is about the same as ours after we did our first 3 or 4 transactions, i.e. we were out of useable equity (money).  We say we started the lazy way, i.e. using equity, but it was good to experience the mistakes we made in buying properties and on-selling them.

In the end most of us end up without money wondering where to start or go next.  That's when you really 'learn' this business.  We ended up with two cores to our business.  See jvpropertypartners and negative2positive (in our signature below).

We're also big on suggesting that people getting into this business get some good vendor finance foundational education.  However while these courses will give you the 'how to' they sometimes come up short on the 'how to legally'.  We setup the Vendor Finance Institute with a range of products and tools to help vendor financiers remain compliant with the rules that regulate the industry.

Regulation of the industry is relatively new and some old hands are resisting somewhat    The great thing for someone coming into the industry now is that the regulatory framework we now operate in, will be 'standard' for you.  And, believe it or not, we've actually found the regs easy to work with and sometimes they've even made our business easier.  Hard to believe I know    but that's been our experience.

Cheers,  Paul