Hi all,
Can any experienced wrappers inform me of the sort of returns per month per wrap I should expect to recieve as I am getting mixed reports. I realise that this a very general question, but for example I am looking at wrapping an IP at the $200k mark and was interested at hearing from others as to the expected returns.Line of credit mortages seem an interesting avenue for wraps your thoughts???
Cheers
Damien
I think you should be marking up by 20% on purchase price and 2-3% on interest rate, otherwise it is not worth wrapping. On this sort of property that is around $430 per month
Terryw
Discover Home Loans
Mortgage Broker
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terry,
Thanks for the feedback, should I be looking at more dearer IP’s to increase cashflow. Line of credit seems worth a look at your thoughts???
Cheers
Damien
In my Opinion it needs to be at least a 2.2% split
I agree more with Terry.
The majority of our deals are done on a variable of 9.25% (9.5% if the introducer is receiving a commission) and we are paying on average around 6.75%.
Wouldn’t do it for much less and we have the advantage of volume.
Cheers Richard
richard at fhog.com.au
http://www.fhog.com.auThere is no such thing as a problem.
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Hi
You could go for higher priced properties to get more cahsflow, or more of the cheaper ones. I guess it is less work with one big one rather than two small ones, but more risk as well.
I don’t think LOC loans would be allowable for wraps (installment contracts) as these would allow you to redraw repayments, or capitalise interest etc. Not good for the wrappee. If you mean taking a LOC secured by another property, then there would be no probs.
Terryw
Discover Home Loans
Mortgage Broker
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
“I don’t think LOC loans would be allowable for wraps (installment contracts) as these would allow you to redraw repayments, or capitalise interest etc. Not good for the wrappee. If you mean taking a LOC secured by another property, then there would be no probs.”
this would be easily fixed via contractual agreement between Wrapper and wrappee that LOC shall never exceed ammount Wrapee discharge amount.
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