Profits on Wraps..

[shezian]

HI

My husband and l were thinking of getting into buying wraps pretty heavily, as we have a fair amount of equity we can use.
We have just bought one through a company in Queensland, and was under the impression that the profit was much higher than it is.

Getting only $70 per week after tax, is not all that much.
I thought it was more like $150.

You have to do all that running around and trying to get the best price for the house and then find a buyer. So much work for such a small profit. I am aware that when you build it up to 15-20 wraps it is a considerable amount, but alot hard work goes into it and headaches too.

What do you all think?


Snez

 

[michaelg]

Hi,

It helps if you think in terms of a small business rather than an investment.

The investment is not your money so much, rather your time.

The return is not so much the initial deals, rather the system you develop that you can repeat...easily.

Just a thought
Michael G

 

[Aceyducey]

Shezian,

The wrappers I've spoken to & the wrap pack we have tend to talk about a figure of around $50 per property per week.

I'm concerned that you had such a high figure in mind - was it presented to you at that level or was it via your own calculations?

I guess you could increase the margin by increasing the interest rate differential - but that brings its own issues.

We don't do wraps ourselves so I can't give you personal experience. In fact the reason we're not doing wraps is that from our understanding it's really a full-time business & for the time it takes to build up a decent portfolio compared to the income stream & stress, we can spend our time more productively.

BTW: Just thought of an option that may work for you.

Lissy, on this forum, is a serious wrapper who works with investors on wrap deals. Why not speak to her, you might find the returns are better than when doing all the work yourself.

Cheers,

Aceyducey

 

[shezian]

Adecy what other investments

HI
Im sorry if l mispelt your name.
Just wondering if you think wraps are too time consuming, then what other ways are there to use my equity l have in my home to create an income??

Snez

 

[Aceyducey]

Re: Adecy what other investments

Originally posted by shezian
HI
Im sorry if l mispelt your name.
Just wondering if you think wraps are too time consuming, then what other ways are there to use my equity l have in my home to create an income??

Snez

Shezian,

It depends on how much equity you actually have.....

With a million, a 5% return gets you $50K per year. But if you have to borrow to get it out you need a fair bit more to make money.

There's also the Navra cash bond approach, but that's not about making money, simply creating an income stream.

If you've got unencumbered cash you can buy a few cheap houses & take the cashflow.

Or start/invest in a business, build a share portfolio, etc, etc

I don't know your situation or skills, but the options are pretty much endless.

Cheers,

Aceyducey

 

[shezian]

My position

I can tell you what my position is.
We own our own home, we have a line of credit of 280,000. What woule be the best option to use this line of credit?
Cash flow is what we are after.


Snez

 

[Lissy]

Hi Snez
There's a thread called "financial independence" in the Property Investing forum, where someone has asked a very similar question and been given a few different answers. Might be worth taking a look.