Hi, this may seem like a silly question but if there is a business in your area that is already doing wraps, then is there enough room in your area to be doing this as well? Im my town, there is around 250,000 plus surrounding town that I planned to offer wraps in.
I plan to do many wraps other wise it isnt worth my time. So I wonder what the thoughts are on this. How many wraps in 1 year are considered feasable and what are the main deciding factors.
Cheers
Benhi Ben,
havent done Wraps. Dont intend to either.But I know Steve is trying to off-load most of his Wraps deals for various reasons and is having some difficulties convincing the Tenants to cash out of his agreements and deal with a bank mortgage, rather than himself.
Also, How I understand it, is you dont “start” up a business doing Wraps as such. It is just a finance process by which you implement / offer to your Tenants who dont (or can’t) get credit with the finacial institutes. If they default with you, then you keep the property and credit (equity) they have in the deal is erroded.
Steve has a Wrap kit on this website that may still be in print, if not see if someone here will sell you a kit.
cheers
I’d say 250,000 is fine, even if there are some others in the area.
I know some people who do them now and then, and also know some who do more than one or two per month as their main business.
Saying you don’t start a business offering finance must really confuse banks. It doesn’t matter how your business makes it’s money – a business is about making money. In this case wrapping is just what your business does. Talk to your accountant and solicitor about what actual structure you should use.
Good luck,
Craig.
Hi Ben
We always look positively upon the fact that other vendor financiers are operating in our area. This is because these other Wrappers are out there “spreading the word” and helping to make vendor financing just another way of buying your home.
Karen and I had our first wrapees move in in March 2004. We have now completed 13 vendor finance projects and have loved every minute of the ride
It’s been a great learning curve and we must admit that both Rick’s Wrap Pack and Steve’s Wrap Kit have been a great help.By sticking with it, we’re now in a situation that investors are coming to us wanting to do “turn key” joint ventures and vendor financing training joint ventures with us. A situation we would have thought of as almost unbelievable back in 2004
To give you an idea of what’s possible in a couple of years, here’s what we’re up to at the moment:
1. Just exchanged on a wrap training JV which we are just begining to market
2. Getting finance for a new wrap training JV partner for a property we already have wrapees for.
3. Just coming up to “possession day” for some new wrapees as a result of a negative2positive training JV we’re doing with a couple who want to get out from under their negatively geared IP and learn wrapping at the same time.
4. Marketing a training negative2positive JV property for a couple in a similar situation.We bought our first wrap property towards the end of 2003 so we’ve now experienced wrapping in quite a variety of market conditions. For us, there are advantages and disadvantages in wrapping in both hot and slow/declining markets.
It’s not a perfect investment proposition but what is? For us, it’s a medium term, cashflow business that supplies money for real wealth creation, i.e. accumulating equity in property
Good luck.
Cheers, Paul
Paul & Karen Dobson
negative2positive
Turn your negatively geared property into positive cashflow.
Phone: (02) 4984 9540Talk to us about Wrap Training Joint Ventures.
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Thanks for that feedback, Paul, What you are doing is similar to what I want to achieve, cashflow which then I want to inject into some high cap gain props? Maybe some development or a combination of both. such as, purchase a property with a house, subdivide, wrap house then build unit and hold.
What are the main factors that hold you back from wraping more. Eg instead of 13 wraps, in about 2 years, 13 wraps in 1 year and how can you overcome these issues to get a higher annual wrap turnover.
IS it
finding reliable buyers
Time involved to complete each deal.
finance
running out of funds to provide a deposit for the next deal.For this system to work, do you have to rely on receving vendor finance from the seller in order for you continue to wrap once you have reached your borrowing capacity limit.
If so are there many sellers happy to do this? Is ir possible to do this?Will the lending institutions see this as a “business” and therefore see that each deal (each wrap) is providing positive cashflow and so continue to finance the “Company” running this business. (more so after you have completed a couple of wraps)
Is one of the negatives about wrapping that it ties up your avaliable borrowing capacity so that you cant invest in other deals.
Thanks
BenWe have completed over 200 wraps in 9 years and still have over 130 properties under a wrap contract as at 30th June.
At times it can be more than a full time job so back in 2002 we employed 2 full time staff to run the day to day enquiries etc and deal with the payment processing.
All lenders have a slightly different take on how they treat instalment business finance so feel free to email me any questions you may have.
Cheers
Richard Taylor
Residential & Commercial Finance Broker
100% Finance on selected properties in the USA.
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Thank-you Richard, Your information has been an encouragment to continue researching wraps.
Cheers
Ben
It’s been a great learning curve and we must admit that both Rick’s Wrap Pack and Steve’s Wrap Kit have been a great help.
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