Wrap Table

From: Michael G


Just playing around with numbers.

I've attached an excel file that has a simple table of figures and shows you a possible way one would structure a wrap.

Quick and nasty way to get an idea of how the figures work.

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Reply: 1
From: Anonymous

So what IS a wrap and how would I use it?
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Reply: 1.1
From: Glenn M

Absoulutely fantastic Michael!!! Thanks for the spreadsheet. Makes a 'Wrap' easier to explain when this type of information is provided.

By the way...speaking of wraps, Steve McKnight hasn't appeared on the forum for quite a while.

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Reply: 1.1.1
From: Sim' Hampel

Steve logs in frequently to read the posting on the forum (I've seen his name on the current user list quite often). He also pops into the chatroom now and then.

In general, you will find him hanging around his Wealth Tips Online site (www.wealthtipsonline.com.au) - in the discussion forum. I think this and his other business ventures take up most of his time, so he doesn't tend to post much any more here. That is a pity, but unfortunately there are only so many hours in a day !

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Reply: 1.2
From: Michael G

Wrap: short for "wrap around mortgage".


1) Find Solicitor who understands lease-options, vendor finance and installment contracts.

2) Write an ad (Own your own home, easy finance)

3) Answer phone

4) Create a database of callers, take down details.

5) Send out application form (ie who are you, what's your current financial situation and why, etc)

6) Calulate your margin, tell them how much you can fund them. Tell client to go look for property in this price range.

7) Buy property (normal contract exchange). You now own house, you get normal mortgage.

8) Next day you sell house to caller/client/wrappee using a special contact (installment contact)

9) Set up direct debit system. Client, pays you an installment, into your account, bank takes out their mortgage repayment, remaining cash is yours.

10) Goto to Step 1, repeat.

You will need:

- a savy Solicitor (and one that has good time manangement, and can act quickly).
- a good Mortgage Broker (not every lender likes wraps)
- a good accountant (to tax you how to best structure for tax and capital gain).


Used to invest in areas for CASHFLOW where there is NO GROWTH.


Wraps will eat into your DSR (debt serviciablity ratio) and reduce your borrowing capacity for potential capital growth deals.

IT IS BUT ONE METHOD of investing.

Why me?:

they are "small deals", get's me into the market, lots of small deals means I get to practice buying properties (and each some cashflow at the same time). Practice on the small things so you are ready when the big deals come along.

I get to practice talking to - clients, solicitors, agents, lenders, etc. For me, its a great "hands-on" training program in real-estate and property investing. Which gives me $$$, instead of my paying $$$$ to learn :)

Michael Gruber
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Reply: 1.2.1
From: Felicity W.

Thank you for all this information Michael, I have found it very interesting.
It's all stored away for future reference!!
Keep smiling
Felicity :cool:
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