I have just read all about Wraps. Sounds like a great concept. I am now interested in doing this with a current IP that is now negatively geared. I am very interested to hear from anyone that has done this.
1. What was your experience?
2. What would you have done different?
3. Did you purchase the WRAP kit?
4. Do you think it necessary to purchase the kit?
5. Would you did it again? (WRAP).
6. What are the positives and negatives of WRAP?Any information or feedback would be very much appreciated.
I have done some wraps, but would not do them again. The returns are too small for the hassle, and you lose out on any capital growth in the long run.
Terryw
Discover Home Loans
Parramatta
[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
Thankyou for the feedback Terry. You mentioned you found it too much hassle. What was the biggest hassle for you? Did you purchase the wrap kit. If not, do you think this may have helped? What I have read about wraps, the more properties you have the better. What are your thoughts on that?
Guess i have to for once diagree with Terry.
If it hadnt been for wraps i would have been able to retire 2 years ago and spend 3 months on the golf course each day.
Whilst I am back to work through boredom at home and being under my wifes feet I am still able to enjoy the cash flow and capital returns that my wraps bring with it.
Email me if you want any wrap information.
Cheers Richard
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Richard Taylor | Australia's leading private lender
Richard is wrapping professionally as a business, whereas I only dabbled in a few. It certainly can work, if you are prepared to put in the effort.
I did purchase Steve’s wrap kit and think you probably should buy this if you are serious.
I think the biggest hassle is the quality of the tenants. Some just don’t want to pay occaisionally. Others are always late etc. You have to factor this in and develop strategies to avoid it.
When I did it the market was growing fast. Most of mine had cashed me out within 2 years, and their properties had doubled almost. I therefore missed out on most of this capital gain in return for a relatively small positive cashflow. I had a small profit and could have purchased more properties to replace those ones, but the market had jumped so much, it would have required a much larger deposit to get back into the market – eating up most of the cash released.
Now the market has slowed, so the cashouts should take much longer to occur.
Other things to think about are:
– difficulties in borrowing
– bad publicity
– legally smart wrappees who may take you for a ride.Terryw
Discover Home Loans
Parramatta
[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,
Thankyou for all that information. I have decided to buy the kit as yes I am serious about commencing. I have worked out how many properties I want to purchase and a strategy to commence. So here goes.
Thanks
SharebHi guys,
I pretty much novice here but i am considering lease option in the future. Richard and Terry have you done lease options in the past and if yes what are your experiences? Can you give me bit of a pro&cons. I am bit like Mukta confused between these two, wraps and lease options.
Cheers.Yasmina
Yasmina
Hi Yasmina
Which State are you in?
Cheers Richard
[email protected]
http://www.yourstatefinance.comSpecialising in US & IP finance.
Richard Taylor | Australia's leading private lender
Richard,
I know you are from QLD as well. How does the FHOS work with vendor financing in Qld. I think it is different in each state? Is there a waiting period and if so, does the purchaser pay it at that stage.
ThanksI am in QLD Richard, same as you.
Yasmina
Yasmina
Lease options are similar to wraps, but are preferrable to wraps, for me anyway, because:
– less problems with finance
– can be structured in many ways
– can still access equity
etcTerryw
Discover Home Loans
Parramatta
[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
Yasmina
In Qld the $7000 Grant is not available until:
1) A minimum of 12 months from the date of the installment contract.
and
2) The purchaser has paid a mimumim of 10% of the original inatllment contract price in monthly repayments. These can be of a principal nature.
I.e Installment Contract say $150,000 monthly repayments say $1000 / month/ The to pay 1-% of the original contract price would be $15,000 and would take 15 months.
If however the repayments were $1500 / month then 10 x $1500 = $15000 however you would still need to wait a further 2 months.
There are also a few other minor requirements but this is more to with the processing of the Grant and the paperwork rather than the mechanics of when it is due.
Please feel free to email me if you need further assistance.
Cheers Richard
[email protected]
http://www.yourstatefinance.comSpecialising in US & IP finance.
Richard Taylor | Australia's leading private lender
I have a few lease options clients at the moment. I was looking into the Wrap. They both seem to have you wait for your money. They both allow for some cash flow monthly. They both have you deal with potential tenant issues…. I guess what I have done is really check people out. Keep in mind that your clients, if perfect…. do not need either of these options. So you are and will not be dealing with “A” level credit here.
This is what I do,Do they make enough money? Can they afford the financing?
What are there credit issues? Can they be fixed if the buyer is willing?
Do they have an “option” deposit that they could loose if the default?
Do they really want the property….. or just say they want…. There are allot of talkers out there.It appears to me that the difference in the “lease option” and the “wrap” is that you are no longer a landlord. You become the bank. If they don’t pay in a lease option, you evict.
If they don’t pay in a wrap, do you foreclose?Do you need to let you bank know that you have a wrap now on a property that they have a mortgage lein on?
In a wrap, does the buyer get to deduct the interest? (not the case in the lease option)
What about an agreement for deed? Has anyone done that?
Hope my 2 cent helps.
ds
Hi Terry;
Could you please elaborate on “legally smart wrappees who may take you for a ride”. This sounds ominous. How would this happen. – thanks eddie
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