All Topics / Creative Investing / VF – Rent to Buy opportunity

Viewing 4 posts - 1 through 4 (of 4 total)
  • Profile photo of slidersftpslidersftp
    Member
    @slidersftp
    Join Date: 2006
    Post Count: 8
    June 27, 2011 - 1:18 pm

    Hi –

    My investment property tenants of 4 years who are also mild acquaintances of ours have recently expressed interest in purchasing the property. Hearing that news I like the idea of vendor finance as an option to put forward to them. Started reading and learnt a little about instalment contracts. I understand the need for ACL coverage if making this a commercial habit or maybe even as a one off.

    What are some recommended paths to leverage this opportunity in regrading to VF/Lease/Options/Rent to buy? Should I just stick with a straight cash like sale (via a bank loan) and thank my lucky stars I don't have to pay a real estate agent?

    Cheers,

    Troy

    Profile photo of Paul DobsonPaul Dobson
    Participant
    @pauldobson
    Join Date: 2003
    Post Count: 1,196
    June 27, 2011 - 11:53 pm

    Hi Troy

    Whether I'd suggest you use VF to sell this property would depend on your future plans.  If you've set out a plan that includes a positive cash flow strategy for this property then, yes I'd probably suggest you consider selling it with VF.

    However, at this point, all that seems to have happened is your tenants have expressed an interest in buying the property.  Selling traditionally, gets all your money now and frees you from any commitment to the property.  Therefore in the greater majority of cases I'll suggest that people try a traditional sale first and, if that doesn't work, consider a VF sale.

    Once you go through the decision process above and if VF is your chosen course, then we can have a look at what VF selling strategy you might use.

    Cheers,  Paul

    Paul Dobson | Vendor Finance Institute
    http://www.vendorfinanceinstitute.com.au
    Email Me | Phone Me

    An alternative way to finance your home.

    Profile photo of kaz101kaz101
    Participant
    @kaz101
    Join Date: 2005
    Post Count: 45
    July 1, 2011 - 9:00 pm

    Hi Troy,

    As well as making sure you know what you want (as Paul mentioned above) what's the situation of your tenants? If you were to sell it to them as a 'normal' sale do they have the deposit required for a bank?

    Knowing what they want and can afford may also help you decide which VF selling strategy is your best course.

    Cheers,
    Karen

    Profile photo of slidersftpslidersftp
    Member
    @slidersftp
    Join Date: 2006
    Post Count: 8
    July 2, 2011 - 5:42 am

    Many thanks for your time replying, it has been very helpful.

    Regards,

    Troy

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