David and Julie Siacci

[Savanna100]

I believe it will only get better as the Vendor Finance Association of Australia grows and the new Australian Credit Licence comes into force.

Hi, Can you please explain the basics of the new requirement above, I saw it mentioned on another property board and I'd like to know what it means and what I'd need to have in order to wrap property if things have changed since the Rick Otton 2008 boot camp I went to.

BTW, I heard David and Julie speak at that boot camp and they deserve every bit of their suiccess. I certainly havent discarded the possiblilty of wrapping one day. I went to the boot camp specifically to see if I could wrap as part of development (eg, buy a house, subdivide off the back yard, wrap the front house and develop the back seperately then wrap it). Properly handled, I think you may be able to avoid the GST issues and still get all the advantages of wrapping but there may have been GST changes since then which may add more requirements than just holding developed property for 5 years to avoid GST....happy to hear any thoughts.

 

[Lofty]

Hi Savanna

Pretty much the same post is on this forum also, at:
http://www.somersoft.com/forums/showthread.php?t=60707

As you're not doing Vendor Finance right now, I'd suggest you keep up with what's going on regarding the Australian Credit Licence and Vendor Finance by joining the Vendor Finance Association of Australia. The VFA are keeping it's members up to date regarding the new Licence and it's requiremnts, via their regular meetings and special meetings on this subject.

I think Lease/Options may not be covered by the new legislation but I'm sure all the other Vendor Finance techniques will be covered. Not a big deal really because the existing, State based, Uniform Consumer Credit Codes already covered pretty much everything other than L/O's. The major change will be, instead or W.A and Vic just having a credit providers licence, all States and Territories will have licencing, i.e. the Australian Credit Licence. The W.A. and Vic licences were easy to get. We'll have to wait and see, regarding the new one. Hence my suggestion to keep in touch with the VFA.

Yes, building two, or subdividing so you end up with two residences is a technique we enjoy. As you say, sell the first with an Instalment Contract, so that it's cash flow positive and keep the other as a negatively geared buy & hold. One pays for the other.

As well as getting advice from the VFA I strongly suggest you get appropriate advice from a VF savvy solicitor when the time comes.

Cheers, Paul

 

[Savanna100]

Thanks very much for that info Lofty, I will eventually get to try this technique. I would probably use Tony Cordato from Rick Otton's boot camp if I went ahead with VF.

I joined the Vendor Finance Association of Australia a few years ago, (paid the fee and never heard anything more so I didnt continue) but I'd be keen to get back in if there was some way of being involved in Canberra, everything (like meetings and functions) seemed to be in Sydney. Could you pls let me know if there is anything going on down here (meetings etc).

Thanks again

 

[boods99]

5. Knowing that two of the major banks in Australia have given mult million dollar lines of credit to two vendor finaciers we know, in the full knowledged that the properties bought with these lines of credit were going to be sold with vendor finance.

Cheers, Paul

The thing is, the bank doesn't give a hoot as to what you use your LOC for, they have their bases covered because they can sell the property used as security for the facility. I have a LOC (3 in fact) against my properties, and if I wanted to, I could use the proceeds to tread myself to a half dozen high class hookers and all the powder I could get. The banks don't care.

So...wondering out loud whether or not S. McK bought 30,000 properties in 16seconds all using funds from a humungus LOC...I doubt it.

Still yet to receive a categorical answer to my question...all we seem to get is fluff...

Boods

 

[Lofty]

Hi All

I stand with my earlier comment, i.e. "Yep, if you go by the average mortgage documentation you can't do it. No more argument about that." So it would seem that the banks simply won't allow it. And then you see the following:

1. A good friend, NSW, went to one of the big four and showed them the figures of his vendor finance business. They gave him $5 million to buy properies that they new would be on sold with vendor finance. The only stipulation from the bank was that the individual loans for each property could not go above 80% LVR.

2. This same person later went to another of the big 4 and got $10 million for the same purpose.

3. An aquaintance in Qld got $10 million for the same purpose from one of the big 4, fully disclosed. The deal was negotiated in the banks HQ in Nelbourne.

4. Two years ago a close friend in NSW disclosed to one of the big 4 that all the properties loans he has with them are for wraps. This declaration wasn't just to the local bank manager who then kept it quiet. It was fully declared in the process of a refinance for a wrap buyer. Not a word was said.

5. Just two weeks ago, I heard from another vendor financier, in NSW, that's just got a fully disclosed amount from one of the big 4. He didn't tell me the exact figure but it was in the millions.

Banks obviously need to protect their security but they're not averse to seeing a good business prospect when it's put in front of them ;-)

Cheers, Paul

 

[Justa housewife]

Is your cup half full or half empty?

I think what is important to remember is that is so much easier to pick holes in something we know nothing about or we stay with old misconceptions on how you 'think' something works. I have been to listen to many, many educators and still go in knowing that i will have heard a lot of it before. However if i walk away with 1 thing that enables me to move forward as a property investor then i come out the winner.
To me anyone who does not need a full time job to move forward in the property investing world has my vote of confidence.

 

[Justa housewife]

Vendor Finance association

savanna,I just noticed your post about joining the association and never getting to a meeting. I know that the association is quite strong now with meetings across many of the states. I am sure if you contacted [email protected] they would point you in the right direction. David and Julie Siacci are both executive members of the committee.There is also a website now. www.vendorfinance.asn.au

 

[Savanna100]

savanna,I just noticed your post about joining the association and never getting to a meeting. I know that the association is quite strong now with meetings across many of the states. I am sure if you contacted [email protected] they would point you in the right direction. David and Julie Siacci are both executive members of the committee.There is also a website now. www.vendorfinance.asn.au

Thanks for that. It would be great if I could meet up with people interested in doing this in Canberra/southern region or if there were meeting held here.

 

[boods99]

Hi All

I stand with my earlier comment, i.e. "Yep, if you go by the average mortgage documentation you can't do it. No more argument about that." So it would seem that the banks simply won't allow it. And then you see the following:

1. A good friend, NSW, went to one of the big four and showed them the figures of his vendor finance business. They gave him $5 million to buy properies that they new would be on sold with vendor finance. The only stipulation from the bank was that the individual loans for each property could not go above 80% LVR.

2. This same person later went to another of the big 4 and got $10 million for the same purpose.

3. An aquaintance in Qld got $10 million for the same purpose from one of the big 4, fully disclosed. The deal was negotiated in the banks HQ in Nelbourne.

4. Two years ago a close friend in NSW disclosed to one of the big 4 that all the properties loans he has with them are for wraps. This declaration wasn't just to the local bank manager who then kept it quiet. It was fully declared in the process of a refinance for a wrap buyer. Not a word was said.

5. Just two weeks ago, I heard from another vendor financier, in NSW, that's just got a fully disclosed amount from one of the big 4. He didn't tell me the exact figure but it was in the millions.

Banks obviously need to protect their security but they're not averse to seeing a good business prospect when it's put in front of them ;-)

Cheers, Paul

soo...Paul, what did this person use as security for the $5 Mil and $10 Mil loans?

 

[Lofty]

Hi

Sorry I may not have made myself clear. They weren't given $5 mil and $10 mil to do with as they please.

They were given access to that money, as a pool of funds, to purchase residential property, with each property having a maximum LVR of 80%. The security the banks used was the title of each individual property. It was the business plan and accounts of these vendor finance businesses, that gave them access to these bank funds.

Cheers, Paul

 

[David Siacci]

Hi Andy Pandy,

It seems to me that lots of people has nothing better to do, than making totaly uninformed comments. I just don't understand why can't they find some other stupid hobby for themselves.
Anyway. Don't forget: You should only follow people who already achieved what you want to achieve! (And clearly enough most of these people will never do! All talk ......)

So back to the topic, Julie and David Siacci learned the trade from Rick Otton and all they did is follow the steps what they've been thought. That is the only secret to success.
Choose what you want to do, find the master of that field, learn the trade from the best at the field, don't change the system, do it yourself.!

That's it, works all the time.

Good Luck: Tamira

Hello Tamira.

If life was so simple. Julie and I completed our first Vendor Finance deal in 1996. We then started looking for others who had more knowledge in creative aspects of real estate investing. We started with John Burley in late 1996 and 97, we then went to seminars by Jan Somers, Dolf Deroos, Dymphna Boholt, Investment Institute, Rick Otton, Tony Robbins, Jamie Macintyre, Steve Macnight and the list goes on. With some of these we were even involved in educating others. I have education packs from many online sources and more investing books on my shelf than I care to add up. There is no doubt I was involved with Rick for some time as one does with any educator.

Once you attend or even receive some educators material more than once they will call you one of their students. Once you show a bit of success in a your chosen field then some will try to exploit that. As long as that exploitation is mutually beneficial then it goes on with good reason. They will all say you were a student of theirs and your success due to them.

To make the assumption that I am riding off the back of one educator and just following someone elses steps is a bit of a narrow view of things.

Julie and I are self educated. We are active investors and come from the "school of hard knocks". The difference with us and many others that make a success of ourselves is persistence. When it knocks you down you can choose to stay down or you can get up, find a way, and move forward.

It all began with Rich Dad Poor Dad. Robert taught me to open my mind...

David Siacci

 

[Lofty]

Hi Ray

In 2005 we took control of three properties from a gent who was about to be foreclosed on (too many negative gearing seminars). I guess we "grabbed" both the property and the loan but we prefer to say we now "control" both the property and the loan. This is done with a lot of strong legal paperwork. Five years later, we've sold the property in Deception Bay, Brisbane, using our signatures and our legal paperwork. The second property in North Parramatta and the third in Newstead, Brisbane we've kept as buy (control) and holds.

The paperwork we use is the same used by Dave & Julie.

Ray, may I suggest that we all don't know what we don't know. If you ask for an explanation, instead of flaming with agressive accusations, people here will happily give you more information.

Cheers, Paul

 

[BayView]

Hi Ray

In 2005 we took control of three properties from a gent who was about to be foreclosed on (too many negative gearing seminars). I guess we "grabbed" both the property and the loan but we prefer to say we now "control" both the property and the loan.
Cheers, Paul

Did the Bank re-assign the existing loans to you, or were the original owner's loans paid out, and your own loans with your names and or nominees used?

I know in the USA they have the ability to re-assign loans ( a bit like the Tax liens), but I didn't think you could do it in Aus?

 

[Lofty]

Hi Marc

Among other paperwork we use to control both the loan and the property, the owner supplies us with permission to deal with the loan on their behalf. Please understand that it took some time to work out how to do this, so the information I've just given is very non specific.

However, I'm also not holding this information back in order to sell it later, so this isn't a sales pitch for a manual of similar, just a bit of information on what we do.

Yes, most people usually tell us this can't be done in Australia ;-)

Cheers, Paul

 

[BayView]

No worries.

I wasn't doubting what you were saying was true - just that I hadn't heard that re-assigns were possible here.

If that's the case, then that could be a very attractive strategy?; take over say; someones $200k loan in return for the title on their property worth $400k?

Is that something like how it would work?

 

[Amadio]

Yes, we did this many times in the USA. It's called "assuming the loan" and in the 80's you didn't even have to get the lender's permission. (No wonder the USA got into strife).

If you got a really good assumable mortgage, like a fixed rate 30 years for 4%, it was a great selling point for your property. 5 years into it you could sell the house with mortgage and the new owners would then have a 25 yr fixed at 4%.

 

[Lofty]

Hi All

Amadio, I would love to have had that experience in the US. Although I'd have been terribly disappointed when I got back to OZ ;-)

Marc, yes we find it very attractive but we usually don't get that level of "controlled equity" in the property, when we first take control. Usually the loan amount is pretty close to the value of the property. However taking control at that point is still very attractive, especially if you've only paid a few thousand to get the loan back into "good standing". From the time we take control until the time we decide to sell the property, the cash flow (positive or negative) and capital gain is ours.

Cheers, Paul

 

[redwing]

Happened to drop onto the Rick Otton web-site whilst looking at some other stuff; David & Julie are on a small video grab there telling how they purchased thier own residence for 10c

 

[redwing]

David & Julie were also in PERTH last night for an event, anyone from here attend and pick up any gems?

 

[DavidMc]

Yes I attended the presentation in Perth.

It started off a bit slow (for someone who is already quite educated on PI), however did show some interesting real world results and reveal a reasonable amount of juicy information given it was a freebie 2 hour seminar.

My two big questions (which remained unanswered - but hey, fair's fair they gotta be able to sell something) were;

1. How do you find the buyers?
2. Have you ever had to kick anyone out?