All Topics / The Treasure Chest / Wrapees looking for Investors.

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  • Profile photo of venturaventura
    Join Date: 2003
    Post Count: 7


    I have got a few interested wrapees ( friends) whom I can fwd to any intrested party. But the wrapees want detailed clarification as to how the system works. I have explained to them as per below to the best on my knowledge in broad terms:
    – hse = 400,000
    – investor adds 20% margin = 480,000
    – 30 yrs = 1560 weeks
    – thus $308 rent per week for 30yrs.
    – tenant mantains the property.

    – does the potential tenant has to pay any deposits etc.
    – When is the hse title transfered to the tenant.


    Profile photo of hilaryhilary
    Join Date: 2002
    Post Count: 146

    You have a lot more to consider.
    Firstly, have they any deposit or fhog’s to come off the pricipal?
    But, mainly, you have only calculated this as an interest only loan, therefore your wrapee owns nothing after 30 years!
    May need to read the book, and find some software capable of adjusting interest figures for early payouts.
    More homework needed[:O]

    Profile photo of lynne14lynne14
    Join Date: 2003
    Post Count: 29

    I am no expert but I’ll give it a try, firstly, your numbers dont add up. A wrap contract is similar to a bank mortgage. the outstanding amount is x by the interest rate (which is usually 2-3% above standard rates) which would be a lot more than $308/week Also, regarding deposits it depends on what the Wrapper wants, and the title is transferred after the final payment is made. Have a look in previous threads there has been many discussions which shall give you much more information. i hope i have helped a bit. – well i see whilst writing this you have another answer …

    Profile photo of HulaQueenHulaQueen
    Join Date: 2003
    Post Count: 23

    Here are some numbers to consider:

    Purchase Price: $400K
    Wrap Price: $480K

    Assume 20% deposit by investor (80K) and 20K deposit by buyer. On top of that between 12K – 18K payable by investor in transfer duty, and a second transfer duty of 15K – 25K payable by the person being vendor financed (if an Installment Sales contract is used – not needed if using other options).

    Underlying loan: 7%
    Margin: 2%
    Interest rate for vendor finance: 9%

    Weekly payments: $861

    Cashflow for investor on a 80% P&I loan would be about $289/week. Sounds like a lot until you consider how much cash is in the deal. ROI including closing costs would be about 24% on an P&I loan.

    Sheryl & Piers

    Profile photo of --Brett--–Brett–
    Join Date: 2003
    Post Count: 20


    If you/ your friends are still keen, please send me an email. I might be able to help them into a house of their own.

    [email protected]

    Profile photo of Richard TaylorRichard Taylor
    Join Date: 2003
    Post Count: 12,024

    Hi Ventura

    You don’t mention which State you are but would be happy to have a look at the deal if you want to email me more information

    Cheers Richard
    [email protected]

    There is no such thing as a problem.
    Just a solution waiting to be found

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    Email Me

    0-40 Properties in a decade with an unencumbered value of over $35M. Email for a copy of my API article

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