I know a lot of people swear by +cf property investing as being superior to -cf property investing. I can see pros and cons of both strategies, especially when considering investment goals – I believe one of the biggest things to consider is the measurement of what you get out of it for what you put in, and the time frame it took to do so (from a purely financial point of view), not considering whether one or the other has more reliance on you working more or not.
For those that have both bought AND sold both types of property at some point in the past, which one from a strictly financial point of view was the most successful? Why? This is considering the amount of money YOU put in (not the bank), versus what YOU got as a return IN TOTAL. What time frame did you hold the properties for? Where were the properties? How much did you invest in total? How much did you get as a return? I am not interested in if a property cost you money along the way, or gave you $50 extra per week to play with as it is irrelevant to my question.
Hi Frugal One
We believe that our long term wealth is measured by the amout of equity we have in property. To accomplish this we use both +cf and -cf.
Our +cf properties are properties we buy and on-sell with vendor finance and our -cf properties are the properties we plan to hold forever
Our +cf properties maintain our lifestyle and support the -cf on our long term buy and holds.We have bought and sold heaps of our +cf properties but not sold any of our buy and holds. They're our long term wealth. The +cf properties, for us, are just a cash flow business, just like any other business you might own.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Thankyou for your interesting response Paul
Hi Paul
Only just heard about Vendor Finance concept in the last week and am still trying to get my head around it.
If you don't mind, what did you mean by on-selling with Vendor Finance?
Hi WorkingOnIt
The definition of Vendor Finance in our booklet is, "Vendor Finance (also know as Seller Finance) is finance offered by a seller (a Vendor) to finance the sale of real estate to a buyer".
What we do, in a nutshell, is buy a house and then sell it to a buyer who can't get a traditional home loan. This is done by making vendor finance available to this buyer.
A few web resources that may help in your search for information about vendor finance in residential real estate are:
https://www.propertyinvesting.com/strategies/wraps
https://www.propertyinvesting.com/strategies/lease-options
http://www.jvpropertypartners.com.au/index.php?option=com_content&view=article&id=50&Itemid=75
http://www.vendorfinancelawyer.com.au/
http://www.vendorfinance.asn.au/ The Vendor Finance Association of Australia
http://www.vendorfinanceinstitute.com.auCheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Thanks Paul for the reply
I will check it out
Our +cf properties maintain our lifestyle and support the -cf on our long term buy and holds.
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