Vantage Capital Limited

From: Joanna K



Hi All,

Has anyone heard of this company or had any dealings with them?

My real estate agent last night told me that they offer deposit bonds and also offer finance on properties.

He told me that with there finance deals they will charge interest only and their rate is an average of the 4 majors. Their finance is for 7 years, and this is the bit I don't get...after the 7 years they wipe out your debt!! I've just looked through their website quickly and they mention put and call options so I assume this is how they do it..but I'm not entirely sure of how it works.

Their website is www.vclimited.com They are an american company that are apparently just starting here in Australia and they have their techniques patented...

any feedback would be great.

Thanks.

Kind regards

JOANNA
 
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A

Anonymous

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Reply: 1
From: Anonymous


i wouldn't touch them with a 10 foot pole (other than to whack them with it!)

be very careful.
 
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Reply: 1.1
From: Joanna K


Thanks for that Anonymous,

Have you had dealings or bad experiences with them in the past?

I have asked my agent to arrange a meeting so I can gather more information from them.

I know the old saying that if it sounds too good to be true.....

I'll pass on the info I get to the forum.


Kind regards

JOANNA
 
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Reply: 1.1.1
From: Simon Tomek


Hi Joanna,

I am now doing my research with this group and have the following to share:

I specifically enquired about their deposit bonds. They claim to issue them at very competitive rates and clients need only 3 times the equity they are applying for - sometimes even two times. Most deposit bond companies are now going for 5 times more equity.

Should a person default on their deposit bond when it comes time to settle, they will purchase the property outright - this reduces the risk for the investor should their circumstances change.

Their finance product -ie buy your property after 7 years at 50% growth or buy out your principle - only applies to the developments they offer. Apparently they claim that many developers are now lining up with them given the assurity that their developments will sell.

I had a word with a seasoned property investor and he claims that what this company does is issue debenture bonds instead of normal loans. In an ironic twist, my friend worked out a similar concept on his own using a 7 year fixed interest only loan (debenture) and realised that he could pay off his principle after 7 years. After 25 years, this debenture would be worth $25 million.

So the finance side of things stacks up. This system has been in place in the States for 20-30 years. In Australia, the greed of the banks and non-bank lenders has prevented this finance technique to flourish. Believe me, Vantage Capital would still make considerable amounts of money from their product, however not as much as the banks.

I have a meeting with someone from Vantage next week and I will share with you what i learn. If all they claim is legit, this system of finance will be of great benefit to property investors if they can get their hands on good stock - there is no use if they can only get stock from sub-standard developers.

cheers
sime
 
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Reply: 1.1.1.1
From: Joanna K


Simon,

Thank you very much for that information. I would appreciate if you would pass on anything extra you may find out!


Kind regards

JOANNA
 
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Reply: 1.1.1.1.1
From: Simon Tomek


Joanna,

The people I work with have had a meeting with Vantage Capital and are investigating their finance package further. They have asked copies of their contracts so that they could go through them with a fine comb to see how it all stacks up.

Rest assured, the finance product does work and has been in operation in Europe and the States for decades and it's great to see that it is finally hitting our shores.

Another thing I found out is the following:

Apart from having the option to sell your property to them at 50% above the original purchase price after 7 years or have them pay out your loan, clients also have the option to put down a cash deposit on a purchase rather then use a bank guarantee or deposit bond. If this happens, the above terms are reduced from 7 years to 5 years.

Their interest only, fixed interest rate finance product currently sits at 6.5%.

That's about it Joanna. I will keep you informed as I learn more. Hope this helps.

cheers
sime
 
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Reply: 1.1.1.1.1.1
From: Joanna K


Thanks a million!!

It sounds very exciting, but I still don't understand how on earth they can say after 7 years "we'll wipe your debt and the property is now yours totally unencumbered".


Kind regards

JOANNA
 
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