Hi All
Would be interested to hear from people, who are doing deposit finance or options.
It's not a new strategy, Rick Otton , has been promoting it for years now.
Since the GFC, many people got burnt and lost their borrowing power.
I have a tenant in Perth, a builder who fell victim , lost everything, even the wife.
Has asked if he could purchase my property by using the deposit finance strategy.
He wants to renovate, then on sell. I don't have a problem with that as it was my worst performer.
Had tried to sell previously but the market was still dropping.
Back to the original question, "Who's making a living out of doing deposit finance ???
Also, Who's heard of "Advance Strategies "and following their strategy using options to make a living.
Hi Rob
Deposit Finance is one of the three most popular vendor finance (VF) techniques in Australia, along with Instalment Contracts and Lease/Options (Rent To Owns).
With Deposit Finance the purchaser gets a first mortgage from a traditional lender and you supply a second mortgage to the purchaser for the bit the traditional lender didn't supply. Usually somewhere between 10% to 20%. This second mortgage is normally notified on the Title by way of a caveat. It's also worth considering the security of second mortgages (there is a reason commercial second mortgage providers charge very high interest rates for these loans).
Deposit Finance was easy to put together pre GFC and almost impossible to do up until about 18 months ago. There are now a couple of traditional lenders we use to put them together and you always need to remember that your purchaser needs to qualify, serviceability wise, on 100% of the purchase price.
We have been working in the residential real estate vendor finance market place since 2003 and you may be interested in a blog post I've just posted called '10 Mistakes to Avoid with Vendor Finance'. It's at:
https://vendorfinanceinstitute.com.au/home/?p=1749
Here's some information on vendor finance (VF) educational resources.
The Vendor Finance Association is a great place to meet vendor financiers. Dates and details of meetings are available at: http://vendorfinance.asn.au/meetings-and-memberships/
I believe it's important to build a good foundation to your vendor finance knowledge and there are numerous educators to choose from. Some that spring to mind are:
Sean Summerville – http://www.thepropertyking.com.au/
Rick Otton – http://www.rickotton.com/
Dave & Julie Siacci – https://vendorfinanceinstitute.com.a…-finance-1997/
Paul Zalitis – http://www.aussiewrapper.com.au/Cash…Investing.html
Gordon Ku – http://gordonku.com/
It is worthwhile researching all these educators and choosing one that suits your style.
Some other research locations are:
https://www.propertyinvesting.com/strategies/wraps
https://www.propertyinvesting.com/str…/lease-options
http://negative2positive.com.au/info…vendor-finance
http://www.vendorfinancelawyer.com.a…ance_intro.htm
When vendor finance started to become popular again in the early 'naughties', it did attract a bunch of make a quick buck "specialists". However more recently the Vendor Finance Association and new legislation have helped to make buying your home with vendor finance a viable alternative for home buyers who are unable to get traditional home loans.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
I started doing Deposit Finance in 1996 and it was the foundation stone of our Vendor Finance business (FHOG Pty Ltd).
Still very much alive and kicking some 17 years later.
As long as the lvr is less than 90% you will get around the genuine savings problem with a few lenders / mortgage insurers although 1 of the insurers will allow a 5% gifted deposit.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Qlds007 wrote:I started doing Deposit Finance in 1996 and it was the foundation stone of our Vendor Finance business (FHOG Pty Ltd).Still very much alive and kicking some 17 years later.
As long as the lvr is less than 90% you will get around the genuine savings problem with a few lenders / mortgage insurers although 1 of the insurers will allow a 5% gifted deposit.
Cheers
Yours in Finance
FHOG Pty Ltd is a great name Richard and you had some great foresight to register it in time.
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
Terry for the first couple of years it ranked higher than the Govt (FHOG) Grant on Google.
We used to field calls asking if we were part of the Qld State Govt.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
That must have been great. You should have trademarked the name maybe!
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
Yes course hindsight is a wonderful thing.
I think we were suprised we managed to even register the Company name in the first place.
Course with the FHOG dying down doesnt have the same affect but still a cool name.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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