Obviously if you did not see A Current Affair tonight (4/12/03) then you would have not seen the issue about WRAPS. I was unaware that WRAPS were legally not permitted in SA and WA. I can’t exactly remember what the business was called but they were buying the house, adding a 20% or more increase to the price and charging up to 3 times the amount of interest that the standard bank does. Its people like them and business that are ruining it for others who are not ripping people off. They could not understand why it had not been banned in the other states as well.
My 2 cents.
Matt“If you do what you have always done, you will get what you have always had.”
“Isn’t it time for a change?”
This story has been done before – especially the Cheryl Benson saga.
Rick posted (or was it Michael) the transcript from his interview with Ben a while ago, and reading it you could guess which bits they would put to air – which they duly did.
Wrapping is not banned in WA, you just need to get a credit providers licence. Wrapping is banned in SA, not because of Steve, or Rick or John Burley, but because of a shonky developer in the 1970’s!!
Cheers
MelI didn’t say that what Steve was doing was one, I think that WRAPS a great way of property investing, but when you get people putting a 21% mark up on the house price, not to mention the 20% loan plan.
Matt“If you do what you have always done, you will get what you have always had.”
“Isn’t it time for a change?”
This mark up on the price of the house is such an irritating issue, I bought my PPOR 2 years ago for 247k and it is going to auction in Jan in the 420k price range, sure we have done work to it but only painting and maitenance. That is a 70% markup (someone can correct my maths if you want).
My wrap has an 18% markup on it and I wont realise that gain for anywhere between 5 and 20 years.
I think interest markup certainly needs to be regulated as it is unnecessary to charge more than 2 to 3 percent above the standard rate.
I didn’t see the story but let’s keep perspective, it was a magazine journalism story where the facts aren’t always accurate. Haven’t you ever heard that a 4 year old child was left in a car in teh morning news and by dinner they were 2 years old. I’m not saying that the cowboys don’t exist but let’s not throw stones without facts.
Cheers
Leigh K[
]Carve your own path and lead the way …
Hi,
I don’t post here often, but feel the need to comment on the issue of wrapping.I think it is repugnent, and believe it represents all that is wrong about this property boom of the last few years.It really is just another way of ramping up the rent.And let’s face it,anybody that considers signing up as a wrappee is not going to be a financial genius. They are people usually on low incomes desperately trying to get a foothold into a market already driven skywards by us investors.
The argument that the wrapper is doing a favour to the wrappee is claptrap, designed to ease guilty (greedy) conciouences.
As an experienced prop investor I am not swayed by the economic arguments put forward.There will be a lot of tears before this sorry trend falls over.
It’s loan sharking pure and simple.Bye
Hi,
I don’t post here often, but feel the need to comment on the issue of wrapping.I think it is repugnent, and believe it represents all that is wrong about this property boom of the last few years.It really is just another way of ramping up the rent.And let’s face it,anybody that considers signing up as a wrappee is not going to be a financial genius. They are people usually on low incomes desperately trying to get a foothold into a market already driven skywards by us investors.
The argument that the wrapper is doing a favour to the wrappee is claptrap, designed to ease guilty (greedy) conciouences.
As an experienced prop investor I am not swayed by the economic arguments put forward.There will be a lot of tears before this sorry trend falls over.
It’s loan sharking pure and simple.Bye
And thats the reason that i don’t feel comfortable with investing in property with WRAPS. From my personal point of view you are renting a house to someone or a couple who is finacialy in truoble, so to speak.
Matt“If you do what you have always done, you will get what you have always had.”
“Isn’t it time for a change?”
Why don’t you do gooder wannabes **** off to where you came from? Have you seen what we did to anyone who knocked wraps on the wrapping forum? We told them where to go.
We wrappers are the good guys here. If you can’t recognise that, then go to another forum. Steve has made lots of money from wrapping, and that’s what we’re all about, isn’t it? Making money. If you don’t want to make money, you’re all fools. We’ll be rich like Steve and you’ll be crying out for us to take your properties off your hands. Don’t mess with the nice guys.
I think wrapping is fine as long as it is done ethically – sure we’re here to make money but if you do it at other’e expense you guaranteed a bitter life in my opinion.
When considering wrapping all parties must know exacly what they are getting into – i.e. independent financial advice is a must. It might well be a mutually beneficial arrangement – and then everyone’s laughing!
So let’s get perspective in this arguement please.
Well,well Craigster,
Who’s a sensitive boy then. Nasty nasty.
It’s exactly your sort attitude that makes the whole concept of wrapping so dodgy.I have done very well out of Real Estate, but have never been that desperate for a profit that I had to go trawling among the less fortunate for it.You are full of bad karma fella,I can feel from here.
Bye,
A had a client once who was in the small loan business, back in the 80’s used to charge up to 66% on small loans. ie borrow $20 repay $24, 20% interest (except it was repayable at the end of the month.) Lived of a small group of trapped uninformed, uneducated, unfortunates…..they were always invited to the Christmas party though…see..he was really a nice guy after all !!
I remember a post on some forum a few months ago,where the discussion centered around the merits of buying up individual caravan sites in parks and flipping for a profit.That’s when I realised just how this property bubble had attracted “investors” who NEVER consider leaving something on the table for the next person.
Bye
Why don’t you do gooder wannabes **** off to where you came from? Have you seen what we did to anyone who knocked wraps on the wrapping forum? We told them where to go.
**blah blah blah**
Don’t mess with the nice guysSome people here have a moral conscience i guess – if you want to make a killing from wraps, go for your life. I personally wouldn’t, but that’s ok, i sleep well at night… [
]There was a time and place for wraps a few years ago – but in the current climate i don’t think there is… that’s just my opinion, each to their own i guess…
And do us all a favour, lose the tough guy wannabe attitude will you ?? If you want swear and hurl abuse go to the pub with your mates – it sounds like you could use a beer or three… [
]Cheers,
Paul…“I want to be rich, and stupidly happy – so far i’ve only managed to achieve the stupid part…”
Jeez this whole argument has become so emotional and rhetorical!!!! Wheres the balance? Where’s the facts? It’s like that cesspit that passes for a parliament at question time!
Disclaimer: I am not a wrapper and have no plans to wrap in the forseeable future….why get involved with something that is facing such a huge challenge in the near future…too easy playing with my charts for that!
Wayne
And do us all a favour, lose the tough guy wannabe attitude will you ?? If you want swear and hurl abuse go to the pub with your mates – it sounds like you could use a beer or three… []cheers
s.i.sSave on a regular basis
“People forget that by saving just $3 per day and investing it sensibly over a working life, you’ll end up with around $1 million.”
those who don’t think they could do wrapping, then don’t do it. but others who are comfortable doing it, Very well Do it.. it all depends on personality and ur own investing strategies. Nobody does it like everyone elses. Success comes from doing things differently ( steve’s popular trade statement )
Kev
As much as people might bitch about wrapping, it is capitalism at its best… recognising that a market exists, and making a product that tailors to that market.
I do agree that it is not too dissimilar to loan sharking. To those that say they do it out of the goodness out of their hearts, I assume your wraps are purely non-profit? Or are profits donated to charity? There isn’t a singe person doing it for anything other than wanting to make a buck.
Whether or not they are taking advantage of those that are desperate or just too stupid to know better depends on how much they can charge and still sleep at night. Judging by many posts, we have few such people here, thankfully. One can only hope the government regulate this industry though, so that markups and interest rates aren’t exorbitant, and there is no room for shonky operators.
Why don’t you do gooder wannabes **** off to where you came from? Have you seen what we did to anyone who knocked wraps on the wrapping forum? We told them where to go.We wrappers are the good guys here. If you can’t recognise that, then go to another forum. Steve has made lots of money from wrapping, and that’s what we’re all about, isn’t it? Making money. If you don’t want to make money, you’re all fools. We’ll be rich like Steve and you’ll be crying out for us to take your properties off your hands. Don’t mess with the nice guys.
Jeez it was just a personal opinion, and to see other peoples thoughts, i wasn’t having a go at anyone!
Matt“If you do what you have always done, you will get what you have always had.”
“Isn’t it time for a change?”
To all those who whinge about wrapping being a rip off………..you have obviously never been in the position of not being able to get a loan.
This is a feeling of helplessness that cannot be described, and yes, these people would grab at any offer.
The best thing about a wrap for them, is the guarantee of capital gain, which becomes theirs—at last they are getting ahead.
eg I bought a house for $34k, vendor financed it on $500 deposit for $43k. Purchaser paid me $100pw for 3 years (previously renting for $130pw). Financed out this year by NAB, who also gave her a personal loan, but the house loan is now costing her $130pw -house loan only- , even tho’ it is 3% less than I was charging (that’s the diff between int only and P & I). So then she had a much better car, and a bonus of $30K equity (at time of refinancing). 6 months down the track, she would now have around $90k equity.
And I don’t feel like a bad person.Let’s face it guys. It’s not the wrapping per se that is bad. Its when someone does it at a highly exaggerated profit margin such as adding a huge margin on the value of the home and/or charging an outrageous interest rate.
Consumer education (perhaps protection?) is needed to help people understand what deals NOT to sign up for.
Regards,
Karan.
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