opinions please

[Jen]

I gather that I am currently rated as a "lurker" but I hope to move up in the world as time goes on.
I'd appreciate advice from more experienced investors. I have a house that was bought last year as a B&H. The tenant at the moment is great and will be staying for at least another year (unless he breaks the contract - and then he's not so great!) He mentioned to me that he tried to buy the house he last rented but couldn't get finance due to being bankrupt at one stage.
My opportunity bells rang dimly with thoughts of a wrap. Now, here's my problems.

1. I don't know anything about wraps except they require a lot of due diligence.

2. I live remotely and feel that realistically with the time restraints in my life at the moment and the problems that distance causes (and believe me it adds a whole new meaning to difficult), learning about wraps and implementing them may be a bit beyond me. The IP and nearest major centre is 6 hours away.

3. Which comes first - spend $2000 and find it's not something I can handle or the tenant isn't interested OR ask the tenant first and if he is interested hope like heck that I can do it with my extra problems of distance and access to people and info I need. If I can't do it then I may have planted a seed in his head and he may just discover all those ads in the paper for vendor finance!

4. How would I go about changing my loan or what do I need to advise the bank about it?

I wonder if I am better to let sleeping dogs lie and enjoy my good tenant however I can't help but think I may miss out on a great opportunity because of lack of real knowledge and fear of the unknown.
I'd appreciate advice and thank in advance anyone who can help

 

[Jas]

If you just want to do it as a one off, I'd be emailing Michael G and asking him a few qs. I'm sure he'd be happy to explain it all.

Just parrot what he says to the tenant

Jas

 

[Les]

G'day Jen,

So what has changed that stops you being a "Buy-and-Hold" investor? Is there a good reason to suddenly want to Wrap this property?

Please note, I'm just playing "Devil's Advocate" here. I am certainly not wanting you to justify your thoughts at all. But it all comes back to "what has changed" for you here? Is it the opportunity to resell? Maybe you hadn't considered buying to resell? That's OK....... Just stop, have a cup of tea, think about it, and decide "Why do I no longer want to keep this property?"

Maybe it was just a passing whim? Maybe you just want to help someone who has indicated they would like to own a property? I don't know - maybe you do know (maybe you need to think a little more, maybe not.....) Anyway, let me echo Jas's thoughts to talk to someone who "does" Wraps if you REALLY want to go ahead with this. MichaelG is one who does these, and one who would be useful to help if you really want to go this way......

If this sounds at all harsh, stop, and re-read it...... It may have sounded that way initially - that is NOT my intent at all - just be sure that you are doing what you WANT to do - and good luck, with whatever you decide.

And, if you just want to bounce more ideas around, well "come on down...." - we're good at that

Regards,

 

[Jamie]

Hi Jen,

Just a quick reply,

If you have your heart set on wrapping, then I agree with Jas and Les... speak to regular posters such as MichaelG and Lissy...

But is there a reason you want to get rid of the peoperty?

You didnt mention where the property was... Wrapping the property gives up any chance of utilising capital growth... As current info suggests most wrappees refinance around 2 years into the process, after 2 years the property is no longer yours (or in terms of CG never was...)...

B]Does this outcome suit your personal plan? [/B]

Were you looking to unload the property anyway? Or have you been swayed by the tenants wishes? If you have no problems with the tenant or finance, do you have a good reason to unload the property? Can you put the money to better use someplace else?

A few thoughts,

Jamie

 

[Jen]

Thanks everyone for your advice and thoughts. The only reason wrapping came into my mind was to increase cash flow because I felt I had a good tenant for it to work.

I am quite comfortable with the buy and hold strategy but thought that if the opportunity was there and it was feasible, I should get outside my comfort zone and achieve the best result I can. But deep down inside where I live I'm worried that it will be too nightmare-ish. From reading your replies, I realise that I can still achieve my goals using strategies I am comfortable with.

The property is in Toowoomba, so the capital growth is there but not as good as the cities.

Les, I didn't find any of your comments harsh. You must have to be a lot worse than that to offfend me! As far as throwing in other ideas, someone told me that lease-buy options are easier than wraps???