Hi shoooshoo
If you are the investor, you have the underlying loan at the lower interest rate, i.e. whatever you can get a traditional home loan for these days. But like buying a property to rent out, you still face the risk that there will be carrying costs between you completing the purchase of the property and getting a tenant or a vendor finance (VF) buyer.
We mitigate this risk by setting up a long settlement for the property and negotiating access between exchange and completion, to show the property to prospective buyers. Also, the pool of prospective VF buyers is almost invisible to the traditional real estate market place and is larger than most people realise. Recently we've noticed we're selling in about 80 days (longer than normal) and figures for traditional sales in the market are showing as about 170 days on the market before sale.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
so its like selling a property , but with a loan attached to it, but if you cant sell it, you end up keeping the house, but with the higher interest rate?
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