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Hi,
I thought I’d provide a little light reading for a Friday arvo…
A few years ago I purchased a property for $38,000 when the original list price was $50,000.
I then turned around and wrapped it to someone else for $65,000 – only to have the original real estate agent call me ‘unethical’.
I was gobsmacked and speechless, since this agency charges above market commission on the basis that they provide a better service.
“Surely”, I said “I offer a different product and a better service and charge a margin accordingly – just like yourselves.” I also pointed out that the repayments that I received were still less than the rent that would otherwise be payable.
I suspect that what the agent was really saying was that he couldn’t get the price, so how could I?
Was I unethical…????… Well you need to decide… but the property two and a half years later is valued at $67,000.
It seems to me that people are quick to point the unethical finger when the buyer is paying seemingly above market value for a property, without understanding that it is a win-win outcome over 25 year agreement and that the buyer gets all capital appreciation.
Just another example of the victim and poor me attitude that afflicts a few people who expect others to constantly bail them out of trouble. It suits them while it suits them and then it’s someone else’s fault when they have no more need.
Bollocks to that.[
]Have a great weekend – go bombers [
]Bye
Steve McKnight
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hello Gavin,
Thanks for your post.
At the time of writing the wrap manual we were led to believe that the only option was to pay off what you received as a wrap off your loan.
However, we have since had a review of legal opinion by several people. Now, while not advice and not a substitute for getting separate legal opinion, we are now led to believe that you must pay the principal component off your loan, but you may keep the interest component.
Now in practice this is a difficult thing to do because the P & i components of payment change.
I think that the best way forward is to seek to redraw your loan say every six months and then take out the interest component but only if you need to.
The only other option I can think of is to have a split payment system where you receive the interest and the principal goes off your loan. Set a benchmark figure and then adjust it every six months.
To this day David and I allocate 100% of the repayment off the loan because by doing so we decrease debt and increase cashflow. This is not out of necessity, but as part of our overall cashflow management.
And Mike – thanks very much for your great post and contribution to the forum. How’s the website going [
]Bye
Steve McKnight
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
Hello Alison,
Thanks for making your first post and welcome to the forum… great to hear from you [
]When it comes to qualifying wrap leads you need to understand that you are not just dealing with “bank rejects” and as such a poor credit risks.
There are lots of people who would be great clients but the major lenders have ignored… self-employed, older persons, high income earners but no savings, ex-bankrupts that went under for personal or domestic reasons (divorce etc.)…
Now as for qualifying leads… the 10 critical questions that I ask, which are outlined in the Wrap Library, all focus on trying to determine if the lead is someone with a victim mentality.
If they are then I won’t go further as from my experience these are the people that will default later on when some other need becomes more urgent (like a new phone etc.)
Hope this has helped.
Once again… thanks for your post.
Bye
Steve McKnight
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
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