Hi, I am still learning about RE investing and don't know much at all about wrapping and LOs, but I am thinking of a stategy to help my brother and his partner buy a unit. We have a very good relationship. They can't get finance themselves (self employed, not very stable etc). But because he sold his Coogee IP last year, he has at least $50,000 left in some interest account.
His partner has an IP in Melbourne that she can't sell yet (can't get out of a loan cheaply), but in about a year she will be able to sell it.
They are renting in Southport QLD for $220 a week, and have seen a unit in that area which they like to buy but can't get finance.
I was thinking, if they can choose a unit, I could buy it for them and they can pay me off until they own it, something like a LO but more flexible, not 'officially', just arranged between us and a self-made contract signed by both of us.
If my brother can pay a deposit of say $50,000 on a say $200,000 unit, I can then get a loan for $150,000 plus I'd have to pay for the cost from our LOC.
Next year, when his girlfriend sells het IP in Melbourne, they can probably pay the whole lot or almost the whole lot.
THe problem is, I actually want it to be a win/win situation where I also make some money, say at least $10,000.
But I find it really hard to make money out of my own family. I also want him to really profit from it so that I don't have the feeling that I'm taking advantage of his bad situation.
What do you think, should I do this? I haven't menditoned it to him yet until I'm sure I want to go through with this.
Any one who knows how to negotiate this the best way possible for both parties? I'd appreciate any comments and opinions. Or if you know a better way, please tell me.
His partner has an IP in Melbourne that she can't sell yet (can't get out of a loan cheaply), but in about a year she will be able to sell it.
They are renting in Southport QLD for $220 a week, and have seen a unit in that area which they like to buy but can't get finance.
I was thinking, if they can choose a unit, I could buy it for them and they can pay me off until they own it, something like a LO but more flexible, not 'officially', just arranged between us and a self-made contract signed by both of us.
If my brother can pay a deposit of say $50,000 on a say $200,000 unit, I can then get a loan for $150,000 plus I'd have to pay for the cost from our LOC.
Next year, when his girlfriend sells het IP in Melbourne, they can probably pay the whole lot or almost the whole lot.
THe problem is, I actually want it to be a win/win situation where I also make some money, say at least $10,000.
But I find it really hard to make money out of my own family. I also want him to really profit from it so that I don't have the feeling that I'm taking advantage of his bad situation.
What do you think, should I do this? I haven't menditoned it to him yet until I'm sure I want to go through with this.
Any one who knows how to negotiate this the best way possible for both parties? I'd appreciate any comments and opinions. Or if you know a better way, please tell me.