Forum Replies Created
No, Melbourne.
Keep smiling
Felicity
fjficm
Thanks! [blush2][blush2]
I think I’ll leave it to the experts.Keep smiling
FelicityRobert
In my contracts, if there is equity available when a default occurs, then under the default clause the property must be valued first. Then, either I can choose to pay the equity to the buyer (upon them removing their caveat of course!) or the property must be sold and the equity paid from the proceeds.
You wouldn’t get a situation with multiple wrap buyers all waiting for the property to be sold to get their equity out, or multiple caveats.Keep smiling
FelicityRobert
You obviously haven’t seen one drawn up by Lewis O’Brien then – all those things are included in my contracts.
Possibly the only difference is that my contract discloses the amount of interest paid over the whole life of the loan, not 7 years, I will query that.Keep smiling
FelicityI certainly come close to insisting that my buyers seek indepedent legal advice – but I still leave it up to them.
The problem with this is that too often they pay the money to get ADVICE – and instead get a whole bunch of false opinions instead.
This happened to me again this week. My buyers went to get legal advice and were told:
1) This is illegal
No, it’s not.
2) It’s a scam
Hmmm, sounds like an opinion
3) You’re only paying interest, so you’ll never pay it off
Well, I ran the loan amount, term and interest rate through 3 different loan calculators on the internet, and all three of them came up with a P&I payment exactly the same as in the contract… doesn’t sound like an interest only loan to me
4) You’ll never be able to refinance
I’ve had 2 buyers refinance in the last few months
5) The house is grossly overpriced
Of the 60 houses listed on realestate.com.au for sale in that suburb, my house was equal to the fifth cheapest. The house about 10 doors away is listed currently for only $3k less than I sold my house at it. Maybe it’s not “cheap” but grossly overpriced? (to the point that they would never be able to refinance, to put the comment in context)
6) If you default you’ll get chucked out immediately and you’ll lose all the money you’ve put into the house
Go read the UCCC, there’s no way I can chuck someone out “immediately”. And like any loan, if you default very early in the contract, you probably have no equity and so get nothing back. But if my buyer has equity in the house, my contract specifically states they’re entitled to their share after sale costs.I guess the point of all this is – independent legal advice sounds good as a concept, but only when the advice received is good advice, rather than opinions which border on falsehoods.
My buyers did decide to still sign the contracts and buy the house, because by the time I’d gone through all the points above, they realised that the lawyer basically was an idiot.
The really sad part is that the lawyer never talked to them properly about their rights and responsibilities, or raised legitimate issues they needed to understand (which I explain in detail anyway!) such as the fact that title doesn’t transfer until refinancing.Keep smiling
FelicityWell, all I can say is that if a RE agent showed you another person’s offer, I’d seriously have to question their commitment to the privacy legislation!
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Felicityjhopper
It’s the fact that 4WDs aren’t transparent that’s the problem.
For those of us in ordinary cars, trying to back out of a car space when you’re beside a 4WD, trying to do almost anything in fact when a 4WD is beside you, is absolutely impossible. I’ve lost count of the number of times I’ve nearly had someone run into me because I’ve had to pull so far out of a car space before I’ve seen them coming.
Mind you, I also hate people who can see a car backing out from beside a 4WD, must know that the driver’s vision is completely blocked, and don’t either slow down or stop.Keep smiling
Felicityjhopper
Okay, I’ll bite!I don’t necessarily hate 4WD owners, but I certainly hate 4WDs!
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FelicityMicasa
Rick has actually dropped his rate, probably because he has more investors than he needs!
Certainly I agree with Fablan, I regularly pay 15% to investors, and I’ve never missed a payment yet, the cashflow is strong enough to support that return.
Yes, too often high returns are “too good to be true”, but don’t let that close your mind to the fact that there are plenty of good returns out there if you’re selective enough.Keep smiling
FelicityI have done Rick’s courses etc, and so I copy his system for investors, and yes, it works and is safe!
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FelicityAhhh, this all brings back memories for me!
Yes, ANZ required us to have an account with them for the monthly direct debit of payments.
We found out on the morning of settlement…..
I raced to the bank and opened an account, only to discover that because the loan was in hubby’s name and the account was in mine, they wouldn’t accept it.
So hubby had to open an account. We managed to get around it on the day by using my account and on the understanding he opened one asap (which he did). We then notified the bank of his account, and of course when the first payment was due they direct debited it from MY account which had nothing in it….
I love dealing with big banks!!Keep smiling
FelicityPut the money somewhere secure for now, and sit down and work out what you want to achieve. Knowing your goals is the first step. You need to know what you want to achieve in order to determine what education you require!
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FelicityDP
I used my own money to start with, and now utilise either investors who want to put in the 20% deposit and get a flat rate of interest in return, or JV partners who want to put up all the money to buy the house while I do all the work. Then of course you can look for “no money down” deals!
Certainly I think it’s best to have some runs on the board before taking this sort of step, but if you have friends or family who know you and trust you, you may be able to work with them from your first deal.Keep smiling
FelicityMy name and number appear somewhere on the We Buy Houses stuff, as I regularly get phone calls from people wanting to speak to a reference.
So in this case I have to say they’re legitimate references!!Keep smiling
FelicityStormbird
I’ve found I’m getting less enquiries, but the ones I do get are much better quality (ie the tyrekickers have dropped off a bit).
Still seem to be wrapping houses in a similar timeframe to previously.Keep smiling
FelicityMy wrap houses are treated as trading stock, and certainly my accountant has said we can’t claim depreciation.
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FelicityPersonally I’ve always found the house first, then the buyer. Yes, it means I have some holding costs, but I find that by buying the houses at better prices, my margins are easier to achieve without the house having to be onsold at too high a price.
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FelicityWhen you find out, I want to know too! I have no 20% left.
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FelicityI think landlord’s insurance is probably essential when you’re starting out. Despite doing all the right things with property managers, our first two tenants broke leases in our first place, and we had to evict a tenant from our 2nd. We claimed on all 3, they were each about $1000-2000. At the time that was a lot of money to us, and it hurt to have lost so much. Since then we’ve had no problems at all, and haven’t claimed again. Nowadays, with a much larger portfolio, I could absorb those few thousand dollars without much fuss. At the beginning, I’d have been stuffed without landlord’s insurance to cover the loss.
So yes, I do think your perspective changes with the size of your portfolio. However one thing is a must – I ALWAYS have building insurance, with an extremely good public liability cover.Keep smiling
FelicityWe built our first home back in the “bad” old late 80s, and paid it off in 2 years despite horrendous interest rates. How? Both of us worked, we bought in a small town on the outskirts of Melbourne and therefore bought what we could AFFORD! We then spent a year travelling the world. It’s all about staying within sensible financial parameters, ie delayed gratification. We’ve since sold that house (boohoo!) and used the money to build our dream house, where we’ve now lived for over 5 years. If we’d tried to jump straight to the dream house, we’d hve been stuffed.
I remember in the Age recently there was an article bemoaning the plight of first home buyers, and it totally cheesed me off. All these poor dears whining about how they couldn’t afford to buy a house – where? – in the middle ring suburbs for $350k-400k. My only thought was – go and buy further out you idiots, then in a few years time you’ll be able to buy where you want.Keep smiling
Felicity
