Wraps

[Qld's007]

To date we have completed and own 146 properties which we have wrapped all based in Qld. We have been involved in Vendor Finance since 1996.

On behalf of investors we have completed over 100 deals.

Happy to answer any questions prospective wrappers may have.

 

[keg75]

There's a few questions immediately above your post that you could have answered...

cheers keg75

 

[michaelg]

1) What criteria do you use to evaluate the propsective purchaser.

- their situation, talking to the customer will help determine why they were unable to obtain normal finance. Was it because they are on a disability pension, casual worker, self employed, seasonal worker, previous bankruptee, divorce and maintence issue now affecting their borrowing capacity, new australian, etc. This is a judgement you need to assest to develop your own risk profile.

- register with baycorp, check their financial history see if what they say to you can be confirmed.

- have them filled out a sheet showing their income and expenses, see if they can afford the cost of owning a home (loan repayments, repairs, utilities, insurance, etc). Again use credit databases to confirm what they are saying.

2) Who is the owner of the property, how do the banks evaluate the asset - as one of yours or of the purchasor? the contract is finalised when money owed is zero.

- you are the title holder, lenders deem you the owner of the asset, however the land titles act and the First Home Owners Grant both have provisions to allow the wrappee to have legal possession of the property for land tax exemption and eligibility for the Grant. The ATO has also made provisions for terms contracts.

2.1) What is placed on the offer and acceptance as a date for settlement?

- depends on whether you use a lease-option or a terms contract, contact a qualified and experience solicitor for this information.

3) which banks will lend money for this type of deal - are there banks who specialise on 'wholesale' vendor finance products?

- in the past I've used ANZ, Mortgage House, Adelaide Bank. These lenders have since changed their policies, however the best thing to do to start is prepare a business plan showing all the risks and approach lenders in a professional business like manner.

4) What happens if you get screwed by the purchaser? what process do you go through apart from sending in your goons? ie do you get the police/ sheriff onto them, how do you get them out of your property? how do you get your money back?

- again depends on whether you use a lease/option or a terms contract. For a lease option, read the tenancy act relevant to your state, for a terms contract read the Consumer Credit Act. Each explains the process of debt recovery. For more detailed information consult your solicitor to ensure your contract has the provision your need to comply with.

5) How much capitol do you need to have initially?

- depends...are you doing it by yourself? are you using a lease/option or terms contract? what price range are you using ($40k or $400k?) What minimum deposit are you accepting from your purchasers? Do your purchasers qualify for FHOG? Are you going to learn as you go, or pay someone to teach you the ropes? These questions need to be answered before yours can be answered.

Will read up on wraps and other options so hopefully what i read will provide some good insights into some of the issues. Maybe someone can suggest a good book - that I can check out of the library or purchase cheap. I don't want to buy a 800+ program or wrap kit as it may not be moeny well spent at this stage.

Lease Option Handbook - a good primer on lease options
http://www.creativerealestateinvesting.com.au/attent.htm

Nothing Down for the '90s - a good way to get your mind thinking creatively
http://www.amazon.com/exec/obidos/tg/detail/-/0671725580/102-0097034-9855344?v=glance

Regards
Michael Gruber

 

[keg75]

WOW - michaelg - you must have had a long lunch - hehe.

Thanks for your comments - food for thought.

I'll check out those books! library here I come....

cheers keg75