Just read this "consumer alert" on the Jenman site and was interested in what people here thought about it. I'm considering getting into RTB/wraps myself.
Wow,
I see Neil Jenman is placing Henry Kaye and Steve McKnight in the same basket!
I know he is trying to warn people (which I'm all for) of potential property scams.
But is there is no limit to what Neil is allowed to write without any responsibility attached?
Fair go.That's Jenman for you always looking on the bright side of life
We have had 6 rent to buy option contracts excercised by purchasing tenants in the last couple of months all with built in equity (the strike price of the option was below the current market due to an upward movement in the market and the ability of options to lock in a price) so not only were the purchasing tenants given the opportunity to buy a house that they did not have anywhere else but they actually build equity in the property without owning it!
But offcourse this type of stuff is not what jenman is looking for it is waaaaay too positive and dosen't result in selling anything for jenman!
I acknowledge that there are scams everywhere and they are not exclusive to rent to buy, I bet there are some unethical jenman agents out there too, but when done properly and ethically, lease options should not be focussing on the poor old ozzy battlers that can't afford shoes to wear, they should actually be focused on employed purchasing tenants that have a great chance of being able to excercise the option in the defined period of time. Investors make millions from buying, trading and excercising option contracts on properties all the time, why is it unethical to extend the privelidge to home buyers?
Great to hear some positive stories on that issue Xenia.
I know Steve doesn't really do or talk about Wraps/VFs anymore, which is fine.
I think Jenman believes he serves a huge purpose as a savior to the broader (ACA watching) Australian community (Mum & Dad investors?). But to compare Steve (an educator who has the highest of morals and humility) to Henry Kaye (who crippled unsuspecting average Aussies out of millions of bucks, in under a decade) is frankly obscene.
Steve is big (& bald) enough to fight his own fight, but I couldn’t let that article slide without a response.
Cheers.
HutchIt's not just Jenman who's anti these schemes, get a look at what the Barefoot Investor, Scott Pape, said in his column on the weekend. http://www.news.com.au/heraldsun/story/0,21985,22223202-664,00.html
After a long investigation by the Consumer Legal Center they have recomended that wrapping is banned.
I rememeber how Jenman got bagged when he knocked Henry Kaye. Now he gets bagged for knocking Steve but considering that Steve has allowed a post on this site hoping Jenman gets cancer – or some such remark, I dont think you can claim to be the white knights (excuse the pun) by a long shot.
I dont agree with all that Jenman says but I sure don't doubt his sincerity.
Leo
just out of interest, if there is someone out there who has done a lot of wraps; more than 20, can you tell us how many (a percentage) of them go to full-term, and how many default and lose the house?
I think this is the crux of the issue with Neil. He has an issue with how many people don't get through to the other end, and that the downside is the ones who don't get hurt.
Facts…
North Sydney was sold with wrap instalment contracts as was Newcastle as was Chatswood as was most other regional cities in australia…..
Fact……on one documented ontract has been disputed in court…………1
Fact……vendor finance contracts made up most real estate contracts in the first 100 years of Australias history
Fact….Meriton the biggest apartment builder in Australia built its empire on vendor finance contracts
Fact…The writer of the article asked for a phone interview but as I'm presently in London my staff asked for questions so we could research and supply accurate facts to the article……………the paper decided to run with old inaccurate outdated information
Fact… Arthur Schopenhauer German Philosopher 1788-1860 said anything out of the ordinary passes through three stages. First, ridiculed. Second, violently opposed. Third, accepted as being self-evident. Look at John Simmons and aussie home loans……..his motto think change
Fact…the federal minister for small business over lunch said he won't allow the abolition of vendor finance as its part of the way of business and couldn't understand what all the fuss was about
the what if ..Forward fear of what could happen in possible events that might eventuate
we can only move forward operating with reality and facts!
Fact…over million aussies now prefer to live and thrive overseas than live locallytherefore does anybody mind if as a country we move on and take on the rest of the world……………
P.S…Rick Otton (London)
Rcik Ottonrickotton wrote:Facts…
North Sydney was sold with wrap instalment contracts as was Newcastle as was Chatswood as was most other regional cities in australia…..
Fact……on one documented ontract has been disputed in court…………1
Fact……vendor finance contracts made up most real estate contracts in the first 100 years of Australias history
Fact….Meriton the biggest apartment builder in Australia built its empire on vendor finance contracts
Fact…The writer of the article asked for a phone interview but as I'm presently in London my staff asked for questions so we could research and supply accurate facts to the article……………the paper decided to run with old inaccurate outdated information
Fact… Arthur Schopenhauer German Philosopher 1788-1860 said anything out of the ordinary passes through three stages. First, ridiculed. Second, violently opposed. Third, accepted as being self-evident. Look at John Simmons and aussie home loans……..his motto think change
Fact…the federal minister for small business over lunch said he won't allow the abolition of vendor finance as its part of the way of business and couldn't understand what all the fuss was about
the what if ..Forward fear of what could happen in possible events that might eventuate
we can only move forward operating with reality and facts!
Fact…over million aussies now prefer to live and thrive overseas than live locallytherefore does anybody mind if as a country we move on and take on the rest of the world……………
P.S…Rick Otton (London)
Rcik OttonHi Rick, I dont know who ur but your facts are spot on. After researching about wraps and like Rick states, there has only been 1 that has gone to court, talk about getting a "BAD WRAP?"
My understanding which is another fact must i add is, vendor financing has been around for many decades inthe US of A and, has been purposely and positively used extensively.
If you base your facts on reality then you will limit your risk in property investments.
Hope no one is offended by any comments included in my statement, they were not intentional.
Marc
We currently hold under our Company First Home Owners Group Pty Ltd 184 properties in Qld which have been sold under Vendor terms.
Over the 10 years we have offered Vendor Finance here in Qld only 1 client has handed in her keys and we have agreed to sell the property (Currently under Contract in Rockhampton) and give her $30,000 of the increased equity over the last 7 years.
Whilst we have probably had another 3 or 4 who have defaulted and then sold to payout the loan no client has been repossessed by me or my 2 partners.
It is all about communication and we are lucky enough to have 2 employees who do nothing else but regularly correspond with our clients.
Richard Taylor | Australia's leading private lender
This is my first post here, and hopefully first of many as I look at developing an investment strategy for my self and wife…. So hello everyone….
On topic, I have had the unpleasant experience of working within the real estate industry as a property manager for 3 years, (thank god that part of y life is over!) and I can't leave without sharing my thoughts on this topic.
I think people should be very careful on what they take on board from Jenman. His business methods are self proclaimed to be the most ethical, however after speaking to many ex Jenman employees, its different kettle of fish behind closed doors.
This is the same person who is anti Auctions and yet sells his own Sydney home years ago at Auction. I don't know much about wrapping, but just be careful of anything you hear from Jenman.
Here you can read about Neil Jenmans business ethics. (not the ones he advertises)
http://www.jenman.org/deceiver.htmlQlds007 wrote:MarcWe currently hold under our Company First Home Owners Group Pty Ltd 184 properties in Qld which have been sold under Vendor terms.
Over the 10 years we have offered Vendor Finance here in Qld only 1 client has handed in her keys and we have agreed to sell the property (Currently under Contract in Rockhampton) and give her $30,000 of the increased equity over the last 7 years.
Whilst we have probably had another 3 or 4 who have defaulted and then sold to payout the loan no client has been repossessed by me or my 2 partners.
It is all about communication and we are lucky enough to have 2 employees who do nothing else but regularly correspond with our clients.
Thanks Richard,
like most people, I don't know much about wraps. I can appreciate the benefits, and the dangers, and it's good to hear about the brighter side of the story.Hi guys, starting out in IP and I'm wondering about the setup details of vendor financing.
My partner and I are looking to start investing, however not having done one before and only holding a PPOR at the moment there's a few unanswered questions before we can confidently start.
Firstly we're not sure whether to use a trust for wraps, or just for our buy and holds.
Secondly, we're unsure as to the loan type that best suits wraps. We had looked toward using a portfolio LOC with sub accounts for our IP buy and holds, but aren't sure whether this will suit wraps also?The response from the banks have been a little worried at the mention of vendor financing, and I'd rather know from someone actually doing them rather than an employee who looks worried at the mention of them!
Your thoughts are most appreciated!
CanberraClaire | Capital Buyers Agency
http://www.capitalbuyersagency.com.au
Email Me | Phone MeExclusively for property buyers
Thanks for your response RickO
Fact … Australians now are the highest in debt per head of population in the world
Fact … CC debt is now over 43 billion dollars.
Fact … 86% of interest free store accounts get refinanced and pay 27% + interest
Fact … Politicians are spineless to make decisions because they won't get voted back in
Fact … People have traded savings plans for credit cards
Fact … lay buy?, no thanks I want it now
Fact … Meriton had to do vendor finance because no bank could justify his pricing, ask what happens to those people after 3 years when he forced them to refinance??
Is it fact or fiction, lets wait and see, or maybe opportunity to take money from the poor little battler who is desperate to get into the great Australian Dream … yes lets take their money and run ???????
D
Pazza
Couple of answers for you:Firstly we're not sure whether to use a trust for wraps, or just for our buy and holds.
A) Personally I would use a separate Discretionary Family Trust with Pty Ltd Company Trustee.
Secondly, we're unsure as to the loan type that best suits wraps. We had looked toward using a portfolio LOC with sub accounts for our IP buy and holds, but aren't sure whether this will suit wraps also?A) It is a breach of the Property Act to have the loans cross collateralised so unless the Portfolio loan (and I assume your are referring to St George Bank) ) so each loan needs to be standalone.
The response from the banks have been a little worried at the mention of vendor financing, and I'd rather know from someone actually doing them rather than an employee who looks worried at the mention of them!
A) A lender would have no idea and eveyone those who do have an idea would run a mile. As i mentioned earlier i have done 1 or 2.
Richard Taylor | Australia's leading private lender
You must be logged in to reply to this topic. If you don't have an account, you can register here.
