Wraps and Investors

From: The Husband


Hello

I have been reading about wraps and they look pretty lucrative. I would like to do a few myself, and would also like to do a few deals with investors. This would involve them taking about the loan and me finding hte clients and doing all the paper work, collecting the repayments etc.

I am just wondering if I would need a real estate licence to do this in NSW? My guess is probably. I am sure there are many people out there doing this-can any of you fill me in?

Thanks

The_Husband
 
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Reply: 1
From: J Parker


Hi The_Husband!

No, you do not need a RE licence to do wraps. You are simply onselling your own property privately, with finance attached. It's that simple. Time consuming to set up, investigate and get a system going, but once done, can reap terrific cash returns.
Good luck with your research.
Cheers, Jacque :)
 
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Reply: 1.1
From: Terry W


Hi Jacque

I agree that you wouldn't need a licence to do it wrap your own property, but I think The Husband (is that your real name?) wants to wrap for other people. In that case you may need a RE licence as you are collecting 'rent' for a fee, you are like a property manager. I am just guessing though.

BTW there is a new aussie web site on wraps at http://www.positivecashflow.com.au it looks very comprehensive.

Terryw
 
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Reply: 1.1.1
From: J Parker


Terry,

Perhaps you misunderstood what I was saying! It is your property that you're onselling, as you settled on it and you have legal title. You could sell it the day after it settles, or ten years after- it's irrelevant.
You don't need a RE licence to wrap, as the repayments you are collecting are not rent but mortgage payments towards the cost of the property itself. The buyers living in the property have both equitable and possessory title, though legal title remains with you (with your lender as interested party of course!) until the loan is either discharged or the buyers refinance with a lending institution. Hope this has cleared it up for you somewhat.
Cheers, Jacque :)
 
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Reply: 1.1.1.1
From: The Husband


Terry and Jacque

Thank you both for your input.

Yes Terry, that is what I was trying to say. Jacque, the property would not be in my name when I start to use investors. They would get it and the loan in there name, I would 'manage' the whole process by finding the end buyers collecting their repayments, sending out statements and then passing the payments onto the investor (after taking out a chunky commission). The more I think about it, the more I feel that I will need a RE licence.

Anyone else out there doing this?

Regards

TH
 
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Reply: 1.1.1.1.1
From: Kellie Dutton


TH
I think a RE licence might be overkill, and I certainly don't think you need one in this situation but then don't quote me on that. You are acting in a capacity that could be construed in a number of ways, maybe consultant, maybe financial advisor, maybe personal assistant to the investors doing their paperwork for them but you will still have funds running through your accounts so I can only say get some really good legal advice and a damn good accountant. PI insurance might be a good idea if deals go sour and someone decides it is somewhat your fault.
Kellie
 
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Family Trust problem

Reply: 2
From: Henry Ye


Hi All,

I have recently signed a contract in my Family Trust's name to buy a
property. However, I don't think my trust has been stamped in the state
(QLD) yet, but it is definitely on its way to be stamped.

Does anyone know if this is legal? I have put down my company as the
trustee for my family trust and/or nominee on the contract.

any advice on this would be appreciated.

btw, I bought a 3 bed hardy-plank house in Marsden, (30Km from Brisbane
CBD). Its in very good condition and it's got a 9.2% gross yield and a
1,500sqm block of land for under $90K. and from what i can gather from
the agents and from tennants that the rental and resale market is very
hot there, and for every vacant house, there's like 15 applications on
it for rental.

Maybe it sounds too good to be true, but thought you all might be
interested in this, and any comments are welcome.

Henry.
 
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Family Trust problem

Reply: 2.1
From: Mark Laszczuk


Henry,
Congrats on such a great buy (if the numbers and stories stack up, that is). Otherwise, you have done the right thing. You have gotten in there and done something. That alone is something that should be congratulated. So, congratulations! Let me be the first to wish you all the luck and success life has to offer, I know you will succeed.

Mark
'no hat, some cattle'
 
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RE: Family Trust problem

Reply: 2.1.1
From: Henry Ye


Hi Mark,

Thanks for your kind words! I believe everyone that's on this forum are
already well ahead of the pack.
So as Dolf De Roos says, ... happy investing!

Henry.

-----Original Message-----
From: propertyforum Listmanager
[mailto:listmanager@bne003w.webcentral.com.au]
Sent: Monday, 26 August 2002 10:34 PM
Subject: Family Trust problem


From: "Mark Laszczuk" <markyfft@hotmail.com>

Henry,
Congrats on such a great buy (if the numbers and stories stack up, that
is). Otherwise, you have done the right thing. You have gotten in there
and done something. That alone is something that should be
congratulated. So, congratulations! Let me be the first to wish you all
the luck and success life has to offer, I know you will succeed.

Mark
'no hat, some cattle'



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Family Trust problem

Reply: 2.2
From: Paul Zagoridis


Hi Henry

If your trust deed has been stamped in NSW it does not need to be stamped in Qld as well. Actually it is really bad to get it stamped in another state as duty is calculated on the value of the trust fund.

Your trustee company can operate in all states and territories of Australia. So it merely needs to record in its minute book that it is acting on behalf of the trust.

Also in NSW, Qld and Vic a trust cannot be registered on the title (it is not a legal entity). The Trustee gets registered. In each state there are provisions for recording the interest of the trust if you desire (that is not necessary).

The simplest in each state tends to be a caveat on the title showing the trust interest.

PaulZag
Dreamspinner
WealthEsteem :: Psychology of the Deal
http://www.wealthesteem.org/
 
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Family Trust problem

Reply: 2.2.1
From: .watto .


Gday Paul,

I am interested in your comment....

"Also in NSW, Qld and Vic a trust cannot be registered on the title (it is not a legal entity). The Trustee gets registered. In each state there are provisions for recording the interest of the trust if you desire (that is not necessary).

The simplest in each state tends to be a caveat on the title showing the trust interest."

I have just recently been informed by an expert in structuring that it is critical to include on the title the following wording....

"ABC Pty Ltd As Trustee For XYZ Trust" as the purchasing entity and not just "ABC Pty Ltd."

Your comment seems to differ could you please expand on your thoughts.


Cheers
watto
Melb Freestyler
 
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Family Trust problem

Reply: 2.2.1.1
From: Paul Zagoridis


Hi Watto

There are two schools of thought.

Conservative types say everything the trustee does should be done "as trustee for the trust". But you can't register Real Property that way. It gets registered AFAIK in the trustees name. The advantage is everyone knows just what the trust owns.

More flexible types realise that as long as there is documentation that the Trustee is acting as trustee (say in a minute book), then that is all that is required. I prefer this way because it is nobodies business what the trust owns - I like the privacy.

As an aside, if your trustee buys shares via CHESS you'll find that you cannot do the "as trustee for..." stuff. Only legal entities can be registered. So trustees must be CHESS sponsored in the format XYZ Pty Ltd (ABC Family Account), the word "trust" is not allowed.

PaulZag
Dreamspinner
WealthEsteem :: Psychology of the Deal
http://www.wealthesteem.org/
 
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Family Trust problem

Reply: 2.2.1.1.1
From: Owen .


Hi Paul,

When you say that the it is just noted in the minute book for the trust, how exactly do you word this? Is it as simple as "Bought property XYZ on date Y for trust account Z"?

Owen

"Gambling promises the poor what property performs for the rich – something for nothing"
 
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Family Trust problem

Reply: 2.2.1.1.1.1
From: Dale Gatherum-Goss


Hi Owen

There is no "correct" format to follow here. Most people will just note in their formal records that an IP was purchased (or shares for that matter) for the trust and the contracts were signed by the trustee.

Keep it simple and do not confuse the issues with jargon.

I have attached a sample of what I have used, for what it is worth . . . I hope that it helps.

Dale
 
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Family Trust problem

Reply: 2.2.1.1.1.1.1
From: Owen .


Excellent. Thanks Dale.

Owen

"Gambling promises the poor what property performs for the rich – something for nothing"
 
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RE: Family Trust problem

Reply: 2.2.1.1.1.1.2
From: Henry Ye


Hi Dale,

so is what Paul said correct? ie I shouldn't have my Trust stamped in
QLD??

and can I just record a minute and then buy the QLD property in my
Company name?

ta.
Henry.

-----Original Message-----
From: propertyforum Listmanager
[mailto:listmanager@bne003w.webcentral.com.au]
Sent: Friday, 30 August 2002 3:44 PM
Subject: Family Trust problem


From: "Dale Gatherum-Goss" <dale@gatherumgoss.com>

Hi Owen

There is no "correct" format to follow here. Most people will just note
in their formal records that an IP was purchased (or shares for that
matter) for the trust and the contracts were signed by the trustee.

Keep it simple and do not confuse the issues with jargon.

I have attached a sample of what I have used, for what it is worth . . .
I hope that it helps.

Dale



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RE: Family Trust problem

Reply: 2.2.1.1.1.1.2.1
From: Dale Gatherum-Goss


Hi Henry!

A solicitor is the best person to tell you whether or not the trust deed should be stamped in each state and I know from experience, that each state has slightly different laws.

I would talk to the solicitor who is handling your purchases and seek their advice on this matter. Failing that, you cannot be too careful and it is therefore well worth stamping a new deed if you do plan to buy interstate.

As for the other matter, yes, buying in the company name and recording something privately should be fine. As I have said before, there are no hard and fast laws to follow here and a lot will depend upon how "correct" you want to be and how comfortable you are playing with any risk.

Each to their own.

Dale
 
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