WRAP Possibility?

Viewing 4 posts - 1 through 4 (of 4 total)

64smartin
Participant
@64smartin
Join Date: 2004
Post Count: 1
September 29, 2004 - 11:22 am
I currently have one single investment property with good equity. We are considering selling this property to fund renovations on our main home.
As we have had the same tennats for 4 years we are considering the possibility of offering this to them to purchase, but beleive due to some old credit problems they may be unable to get finance from a normal institution.
If they were to agree would it be advisable to pursue WRAP finance for them in this case to assist us with our renos?
We may be on the wrong path?
Scotty B
Member
@scotty-b
Join Date: 2004
Post Count: 44
September 29, 2004 - 11:29 am
Hi
Sounds a good case for a wrap.
I’ve never completed one before but as I understand you should still perform a variety of checks to make sure the deal is a safe as possible up front.
I’m sure someone will be able to help you on this forum – I’ll be interest to see what they have to say.
Have you read Steve’s book 0-130????
The wrap product on this website might be a good start[grad]
I live in Karratha and for a fee find quality cash positive deals there, email me at [email protected] to join our database
Terryw
Participant
@terryw
Join Date: 2001
Post Count: 16,213
September 30, 2004 - 1:10 am
The trouble with wrapping it is that you will not get the money to do your renos. You may be able to squeeze a small deposit out of the tenant and get extra monthly repayments which will help you, but you won’t get a large lump sum as you would if you sold it.
The credit problems may not be an issue as these only stay on their record for 5 years.
Terryw
Discover Home Loans
North Sydney
[email protected]
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email Me
Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
froginasock
Member
@froginasock
Join Date: 2003
Post Count: 1
October 8, 2004 - 11:25 pm
Dear 64smartin
If you sell your IP through a WRAP agreement dont you still have to pay capital gains tax on the increased value over the past four years.
Just a thought but if you have equity in your investment property you could refinance a portion of it to a line of credit. it would be like getting a credit card @ 6.5%.