"70+ properties, really??"

From: Michael Croft


"....... and I continue to invest in real estate owning more than 70 +ve properties (and growing)." Steve McKnight

Actually Steve and please correct me if I am wrong but these are wraps, right? If that is the case do you personally own them? Are the wrapees able to refinance and pay you out? If so you own a finance business which maybe very profitable and a good one, but you do not "own" the properties.

If the above is correct you also do not invest in property but in a finance operation/business.

Sorry for being pedantic but if the title is in the wrapees name or can be transferred at the drop of a refinance, you own no property and in fact have little control of the property either.

Michael Croft
 
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Reply: 1
From: Gail H


That seems right to me. Wraps may be lucrative, but you are a credit provider/financier, aren't you? Its really a different game. And you'd have to comply with the Credit Code etc. Definitely not for everyone (though I couldn't really argue with his success)

Gail
 
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Reply: 1.1
From: Gail H


(and what the hell are you doing posting at 4am in the morning!)

G
 
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Reply: 2
From: Michael G


MC,

As far as I'm operating. It is a business. Its a source of cashflow that, when built up, will be a means to acquire properties, do renos/developments, and purchase other businesses.

That is the mindset, and that is how I operate.

Just speaking for myself.

Michael G
 
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"70 properties, really??"

Reply: 3
From: Anonymous


With wraps, ALL the properties are in
the wrappers name (hence they Own the
properties)- until such time as the wrap buyer :

1- Pays for the property in full
(then they get the title)

2- Gets alternative finance and cashs out the wrapper.

3- Goes belly up and leaves the property.

In Steve case he has a mix of wraps and cash flow positive rentals.

Regards
James
 
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"70 properties, really??"

Reply: 3.1
From: Michael Croft


Thanks anon/James,

I was under the impression that the wrapper had a registered mortgage over the property but that title went to the wrapee (with registered mortgage in place). If your scenario is correct then I humbly apologise to Steve as he does indeed (pun intended) have control over the properties.

Michael Croft
 
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"70 properties, really??"

Reply: 3.1.1
From: Robert Forward


Hi Michael.

A wrappee should place a caveat over the property to gain their security on it. This is on top of the normal wrapping contract of cause.

Cheers
Robert

The Sydney "Freestylers" Group Leader.
 
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"70 properties, really??"

Reply: 3.1.1.1
From: Michael Croft


Posted this else where but thought it more appropriate here and the thrust is that a wrap is not an investment in property.

So my particular issue with wraps is that it is a finance business that uses property as the medium, theoretically you can wrap just about anything. Of course one may use the cashflow generated from wraps to actually invest in property. Which is why I have had a shot a Steve McKnight, Michael G and Yuch from time to time. I respect them and they are very good at what they do; they may also invest in properties as well as their finance businesses.

I am told the average wrap lasts 3 years in the US before it is refinanced by a regular institution. So what happens when the 50 wrappees cash the wrapper out? Hopefully good money has been made but what happened to all those "investment properties"? They no longer exist and the process has to be repeated as the income has stopped or the wrapper made a squillion and retires to managed funds.


Michael Croft
 
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Setting the record straight

Reply: 3.1.1.1.1
From: Michael Croft


What follows is an apology to Steve McKnight. And before all you forum addicts jump to conclusions there was no threat of legal action, implied or otherwise, it was sent to Steve in good faith and unsolicited.

Hi Steve,

I think I owe you an apology about my recent posts re wrappers and wraps. Firstly may I say that I have the utmost respect for you and your business and nothing I have said about on the forum should be taken personally.

I have a shot a people who confuse business with property investing and I admit it does get confusing when one does both. Everything I write is truly without malice or prejudice but I can see, having reread it, where my last post which mentioned you by name may have caused offense and for this I apologize.

Kind regards, Michael Croft


Hi Michael,

David said that you had made a post like the one mentioned but to be honest I didn't read it.

Personally, I think that investing done the right way should be like a well run business anyway.

No harm done at this end... but I'd appreciate it if you could make your e-mail below a post as a reply to your thread.

Would you mind doing this?

Thanks

Steve McKnight


Consider it done!


Michael Croft
 
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