Forum Replies Created
- Personal Leadership Development wrote:MR. FAIR GO, PLEASE EXCUSE THE CAPS….YOU MENTIONED YOU PUT AN OFFER …?
Hello Personal Leader
Happy to answer your questions, but I can't find my own post that you are asking about!
Please show me where the post is that you are referring to – we have done a lot and I need to refresh myself on what deal this was about.
Cheerio
Mr Fair Go
I didn't comment one way or t'other, I just brought the news item to your attention.
But I am hoping that the news item means that this bank will more readily take into account the "to-own" part of a "Rent-to-own" payment as "savings"
Currently we have to jump through all sorts of hoops to get a bank to allow those as "savings." Most lenders are prepared (eventually, after considerable proof) to accept it as part of the deposit, but they don't necessarily consider it as part of "genuine savings" as well.
If the lender has a "genuine savings" criteria, this announcement is a plus.
Hi N
Local notice board is a great one, but not all noticeboards are created equal. Test, test, test. Our area has four or five of them, but only one, outside the local IGA supermarket, is really effective. And they get so many notices that the supermarket pulls them all down regularly and starts fresh. I keep a bunch of fliers (with little tear-off tags) already printed out in the car. When I see the fresh board (my previous advert has gone) I whack up a new one immediately.
Local newspaper (not city-wide: if there's a free local one that's best) is good. I have a small I-buy-houses advert (costs $10.60) that runs every week. It is simple and directs people to a website as well as my mobile number. I often get calls from people who say they have seen the advert many times, and just now are responding. It's worth the $500/year to have this, since only one deal covers the cost easily. Sometimes I also put a selling advert in the paper (costs a lot more usually!) but in this area I have found that does not work as well as the noticeboard. In a previous area such an add in the free local paper would pull about 30 calls. This local rag is paid-for ($1.00) and only pulls about 3 calls.
Bandit signs are a GREAT way to get customers. Put a hand-written sign in the window of a property you are selling, and in the front yard – and if your local council is not too sign-police orientated, you can also scatter smaller ones around on poles etc, with appropriate wording depending on your aim: directing people to the property you are selling, or trawling for sellers. Tip: go to a signwriter and buy corflute offcuts. Tomato stakes from the local hardware store are a cheap way to mount them if it's for a yard sign.
A business card can help a lot too, if it's done properly. Your name should be tiny, and what you do should be large. An offer on the back to pay a finders-fee is also worthwhile. Put them in local businesses, keep several tacked to the local noticeboard mentioned above, and hand them out. I find that on the counter at accountants and solicitors offices have been useful places to put a little dispenser of them.
You don't have to get expensive cards, but they need to have a motivating message, and do use both sides! Tip: vistaprint.com.au but don't get the free ones because they have Vistaprint advertising on the back.A website is also be a great way to find customers – both for buying and selling. Don't pay a lot to have an expensive site built. A blog-style site is easily maintained yourself, but don't use the "free blog host" type sites… you need your own domain. Get a good domain name. Make sure people can get on your mailing list at your website. Learn about SEO. We get a lot of business from our websites, but it's not always in the local area. However, when someone calls, even locally, I ask if they have internet access, and get them to fill out an online application. Works pretty well. (Disclaimer: My other company sells domains, builds and hosts websites, installs blogs etc, but I am not asking for business here – we are not the cheap solution you are looking for)
We offer a finder's fee to existing and past clients if they put a new client onto us and they buy. We send a 'thank you' note to the referrer even if the referred does not buy. We keep in regular contact with existing and past clients asking for referrals. These people are your best 'champions'. This referral program has been very successful for us over the years and up to the present.
We are also about to start (in the new year) radio adverts and sponsorship of a real estate information program on our local station. We have high hopes for this, but we are unable to report on it's effectiveness (Yet!)
I saved the best one for last: flapping the gums. Have a sentence ready that explains what you do. Dunno if I should put this on a public forum, but I don't suppose it will hurt… Mine is: "We buy houses and then sell them on vendor terms to people who don't currently qualify for bank loans." Simple and clear. Almost always gets a good reaction, and people remember us and tell their friends. I will often mention in passing that we pay finder's fees if they know someone who wants to sell a house.
These are some of the ways we use to "reach clients". "N", do them. Do them ALL, don't rely on just one or two.
Cheers
Mr Fair Go
propertyjockey wrote:Who are the best types of people to wrap with and why?
PJHi PropertyJockey,
As you already appreciate: the ones who give you the least trouble in achieving your aims with wrapping.
Besides the very wise advice you have already received to check out their current living conditions and employment etc, consider a newish arrangement we have put in place to ensure as far as possible that the customer will truly be able to do what we need them to do.
We now look over an application, and if we think this one might be a "goer" we ask the applicant to fill out a standard home loan application form, and pay a "Credit Assessment Fee" . This fee actually is paid to a Mortgage Broker who assesses their creditworthiness in the light of getting a bank loan down the track. She prepares quite a detailed report for them (CC'd to us of course) with her advice on what they need to do to ensure the maximum chances of getting a loan from a traditional lender in due course.
This accomplishes several important things…
- We are more aware upfront of how long it may be before they can cash us out
- We avoid entering into an arrangement with someone who may never be in a position to cash us out
- We save a lot of time on processing applications
- They are aware of what to do in order to maximise their likelihood of getting a traditional loan, e.g. not to change jobs, not to increase borrowing, to fix any credit issues that have come to light, etc.
Did you note #3? This helps address your concern with time. The "donkey work" involved in processing an application is outsourced, and we make the final decision based partly on that report. Time spent on wrapping can also be minimised if you have good processes in place. Much of the bookwork can be outsourced once you have the procedures down pat. Our part-time bookkeeper works from home, all that she needs from us is put online, she posts monthly statements, payment failure notices, reminds us when insurance is due, etc. It has made our business a lot more stress-free.
Hope this helps
Mr Fair Go
JacM wrote:use the first home buy grant to acquire your first property… live in it for 6 months, then move out and put tenants in it? The extra cash from the grant will be really handy…
I'm sure you meant "twelve months" to fulfil the grant conditions.
Mr Fair Go
Look in the Yellow pages for "House Removalists" or similar, ring some and get some offers. That will give you a starting price. Expect about $5-10k. (yes, that's all they will offer unless it is modern!)
Then put an add in your local paper "House for removal" and at least double whatever you were quoted by the pros.
BTW some councils accept bond guarantees, which preserves your cash. Ask them. You already have a "no" but you could get a "yes"Cheers
Hi Guys!
A few comments, relevant I hope, based on my 8 years of experience with dozens of Instalment Contracts and Lease options in Queensland:
Mal & Jean, it is correct that you have to pay the Stamp Duty upfront with an Instalment Contract purchase. However, if you are an owner-occupier and this is your principal place of residence, you should get a rebate to 1% instead of the investors rate of 2%. Read the rules carefully at http://www.osr.qld.gov.au/
If the Stamp Duty is going to kill the deal for you, why not inform the vendor and ask if you can give them a lower deposit so you can afford the Duty? Alternatively you could ask the vendor if he is prepared to sell it to you with a Lease Option, which does not require the upfront Stamp Duty.
However, the Instalment Contract is more secure for you that the Lease Option. One reason is that with an Instalment Contract you can put on a once-only caveat that is clearly recognised at law, but with the L/O you may need to renew it every three months, which is expensive.
The comments by others above re the plethora of contracts, some good some not so, are valid. You really should get it checked over by a solicitor knowledgeable in this area. I can recommend ours, Aylward Game Solicitors (Mark Game, ph 07 3236 0001) in Brisbane. I don't know if he charges an upfront fee for a new client, but at least he won't have to go and research instalment contracts at your expense! He created the ICs we use – both for selling and buying – and we have never had an issue with them.
Re hidden expenses. Check to see if the vendor or you are paying the rates. Insurance too. If you have insurance on a property under an IC that's paid by the vendor be sure you get yourselves noted on the policy as well as the vendor. If it's a LO the insurer probably won't put you on, but at least ask to see the vendor's policy. If you are at all doubtful of the arrangements of the vendor, insure the property yourself as well. You can get pay-by-the-month that won't break the bank.
By the way, I probably shouldn't tell you this
but as a vendor I prefer to get my Lease Option customers either refinanced or onto an Instalment Contract as soon as possible, because a much larger proportion of the Instalment Contract payment is ours to keep. A typical LO payment might be 1/3 or more option fee (going toward the house, and therefore credited back to the client at the end) but a typical IC payment starts at less than 1/10 principle (again, going toward the house, and therefore credited back to the client at the end). This means for you that you get ahead quicker with a typical LO than an IC. But please . If you are confident you can refinance with Westpac within 2 years, this is worth thinking about.Hope this helps
Hi Lockymac
This will not be a "free house"!
I take it you've talked to the local council?
They generally require a bond to make sure you will finish what you've started (think $20-30k deposited with them)
They also require these days that the finished moved building completely meets CURRENT building codes. Often this requires a new roof, even if the existing roof is perfectly sound.
And of course sewerage or septic, water pipes and electricals all have to up to current standards. And maybe the cost of police escort or cutting the house in half or removing the roof or all three to move it.
This is not necessarily a problem, but every time we have looked at doing it, a "cheap" job has after investigation not looked so hot. And BTW it can take MONTHS and MONTHS for a contractor to finish all of this so you can get that final inspection and your bond back..
So keep your eyes open and check the sums before you decide if it's as good as it looks. We have decided in the past to just sell the house for removal and let someone else have the headaches while we get on with what we are good at. But hey! Maybe this IS what you are good at!
Cheers
Mr Fair Go
markymark84 wrote:Hi MyFairGo,
Any advice?Well, first read Steve's disclaimer, that this site is not providing "advice" that should be relied upon without checking with your professional.
Having said that, save like mad, coz the "no money down" deals are too far apart to make a living with only them.
"Comparatively little money down" deals are fairly commonplace when you know where to look. I generally try to secure a property with less than $10k down, more like $3k if I can.
Second piece of advice is to get educated as to how to safely use options.
Matt007 wrote:' PM meHi Matt – Tried, but "Matt007 is not accepting e-mails."
Can you please edit your profile to allow PM, or else PM me first so I can reply?
thanks
"…interested in people views on what their strategies are now, if any, or are you sitting on your hands for the time being. Is it because the newspapers are telling everyone it's recession time, you are going to lose your job or some other horrible occurance is certain to befall you. On the other hand interest rates are the lowest they have been in decades, vendors are willing to negotiate more than previously and the government is throwing money at people, in particular FHOG, although that strictly doesnt affect the investment market as such."
Buying properties at better discounts, more qualified (retail) buyers (because the banks are knocking them back they come to us for vendor finance), investors looking for my wholesale deals… what's not to like?
e.g. I put an option on a property yesterday. 4-bedroom house with a great position. Badly needs a cleanup. Just $5k down and a year to completely control the property until we sell it. Put an advert on the local supermarket noticeboard around lunch time, and have calls from two potential renovator-buyers already.
Plan to have it onsold for a nice profit within 6 months. Or perhaps flip it for a small quick profit in a week.
Like I said: what's not to like?
We recently lost a sale because, even after several extensions, the buyer could not get finance.
Our solicitor sent me a bill for $330 for his time, being a lot of communication with the buyer's solicitor. Ouch!
So if a buyer comes to me and wants to buy our house, I want to know they are likely to go ahead with the purchase.
Having said that, I myself have sometimes put in multiple offers. I remember once a REA ringing me and asking if I wanted all of them presented, or one at a time. I said All. I will figure out how to pay for it later if they all say yes. If they are good deals, I can find JV partners easily enough, or refi other properties to raise the deposits.
However, the most we ever bought at one time was three, back in the days when houses were around 100k, so it wasnt' too bad.
but as a vendor I prefer to get my Lease Option customers either refinanced or onto an Instalment Contract as soon as possible, because a much larger proportion of the Instalment Contract payment is ours to keep. A typical LO payment might be 1/3 or more option fee (going toward the house, and therefore credited back to the client at the end) but a typical IC payment starts at less than 1/10 principle (again, going toward the house, and therefore credited back to the client at the end). This means for you that you get ahead quicker with a typical LO than an IC. But please 
. If you are confident you can refinance with Westpac within 2 years, this is worth thinking about.
