Hi all,
As the title suggests, yesterday I attended Rick Otton's one-day seminar in Melbourne on How to Buy a House for a Dollar and I just wanted to share the experience with you guys and ask a few questions if I may.
I am sure that some of you must have attended one of his seminars before, so you would probably be familiar with some of these strategies he suggests and recommends using.
The morning sessions were mainly around Rick Otton's history and involvement in property. A history which by the sounds of it is full of 'property transactions' over 4 countries; USA, Canada, UK and Australia.
In the afternoon sessions he unveiled the following strategies in very simple terms, for which I still have many questions as to how they legally work.
The strategies outlined yesterday were as follows (my queries are below):
I am sure that these strategies might not be new to some of you, but they are all fairly nifty and new to me and I'd love to hear your feedback and experiences with these techniques.
Questions:
1. When buying or selling on a rent-to-own or installments basis, who is on the mortgage and title? and how is the scenario set from a legal point of view.
2. They also mentioned in the seminars that some of the larger banks would be willing to "buy-off" the debt from you after 12 months of consecutive payments from your Buyer. Is this true?
3. A contractual clause was mentioned, which is along the lines of "transportability on a home loan" clause. Anyone familiar with this clause?
4. Another one was "Substitution of collateral", which essentially allows you to seize over a mortgage without having to reveal any credentials but a bank account. Anyone know more about this?
5. How do you incorporate these strategies within a trust structure?
I would be very grateful if someone is able to shed some light on these questions for me.
Overall, Rick Otton seems genuine and also good at what he does. He was troubleshooting live in front of the audience that basically threw their problems right there on the table and he solved more than a few, including one where the owner of a $1m house owes $1.25m on it and is struggling to keep up with repayments due to a nasty divorce. I wouldn't go as far as paying the course fees to "study" his strategies, as I do believe that these strategies are commonly known out there and used often.
As the title suggests, yesterday I attended Rick Otton's one-day seminar in Melbourne on How to Buy a House for a Dollar and I just wanted to share the experience with you guys and ask a few questions if I may.
I am sure that some of you must have attended one of his seminars before, so you would probably be familiar with some of these strategies he suggests and recommends using.
The morning sessions were mainly around Rick Otton's history and involvement in property. A history which by the sounds of it is full of 'property transactions' over 4 countries; USA, Canada, UK and Australia.
In the afternoon sessions he unveiled the following strategies in very simple terms, for which I still have many questions as to how they legally work.
The strategies outlined yesterday were as follows (my queries are below):
Installment Contracts (also known as Terms Contracts):
This works best with sellers who are happy for you to make monthly payments for longer than three years.
The idea is as follows:
1. Say you want to purchase a $400k property. After contacting the Seller, you both agree to pay say $10k deposit, then $440k through equitable transfers over a period of time and legal transfer when the property is paid off.
2. Contact a Buyer and agree for them to pay $20k deposit, then $480k through equitable transfers over a period of time and legal transfer when the property is paid off.
3. You get $10k upfront, about $1,000 cashflow $40k at the back end.
Handyman Special:
This is best for buyers with no deposit and sellers with an upside down loan. (Seller’s loan is greater than the value of the house.)
1. You on behalf of the Buyer assume (babysit) the seller’s mortgage.
2. Sell to the Buyers at a higher price than current value based on estimated value after renovations.
3. The deposit is Trade money (labour) for the cost of renovations.
4. A schedule of agreed work becomes part of the paperwork.
5. Work must be completed before buyer moves in.
6. House sells on installment contract.
10.10 Strategy:
This is best for houses with no debt against them, where the Seller is asset rich and cash poor.
1. You on behalf of the Buyer agree to pay 10% more than the asking price.
2. You agree to pay out balance in equal installments over 10 years at 0% interest.
3. You sell-on the property and the Buyer pays a deposit and pays out the balance in equal installments time at 6% interest.
I am sure that these strategies might not be new to some of you, but they are all fairly nifty and new to me and I'd love to hear your feedback and experiences with these techniques.
Questions:
1. When buying or selling on a rent-to-own or installments basis, who is on the mortgage and title? and how is the scenario set from a legal point of view.
2. They also mentioned in the seminars that some of the larger banks would be willing to "buy-off" the debt from you after 12 months of consecutive payments from your Buyer. Is this true?
3. A contractual clause was mentioned, which is along the lines of "transportability on a home loan" clause. Anyone familiar with this clause?
4. Another one was "Substitution of collateral", which essentially allows you to seize over a mortgage without having to reveal any credentials but a bank account. Anyone know more about this?
5. How do you incorporate these strategies within a trust structure?
I would be very grateful if someone is able to shed some light on these questions for me.
Overall, Rick Otton seems genuine and also good at what he does. He was troubleshooting live in front of the audience that basically threw their problems right there on the table and he solved more than a few, including one where the owner of a $1m house owes $1.25m on it and is struggling to keep up with repayments due to a nasty divorce. I wouldn't go as far as paying the course fees to "study" his strategies, as I do believe that these strategies are commonly known out there and used often.