Positive Cashflow From Property
April 11, 2008 – 1:37 amHi,
Here is our next piece of investing information for you.
This time we are showing you a property investing strategy that generates positive cashflow each month. We have used this strategy ourselves and it produced some great results for us.
I hope you enjoy the video …
Ian
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7 Responses to “Positive Cashflow From Property”
hi i have watch this video a couple of times now but i still can not get my head around it it sounds simple enough but i do not have a house and no money to purchase a house either so how do i get a house when the only why is i have first home owners grant where i have to move in and i have to live in it for twelve month myself how do i get around this
By mick on Apr 11, 2008
Hi again Ian,
I have heard of the term Vendor Finance before, but had no idea what it was, and have just realised what is going on behind the seen, when I see the big signs on fences simply saying “We Buy Houses - Phone ####” Seems like a very common sense approach to a particular niche market. I venture there are plenty of people making a killing off this strategy right now, with the property market showing a drop, certainly in NZ anyway.
Keep em’ coming
Cheers
Josh - NZ
By Josh on Apr 11, 2008
Hi Mick,
Many thanks for the question.
OK, so how can you buy a house without any cash? Well, there are a few ways.
One of the ways that you might be able to do it is to use the vendor finance strategy itself to buy your first house? There are plenty of people struggling to sell their properties at the moment. Some of whom would be very pleased if you came along to them with a deal that went something like “I’ll pay your mortgage for you and give you the balance later”. Especially if you said “I’ll make the next payment for you”.
You have reminded me that I wrote an article a while back about buying property for no money down. I will look for the article and post it up here (if I can find it!
).
Ian
By Ian on Apr 11, 2008
Hi Josh,
Yes, I know one person in NZ who has done this with over 300 houses. I think it was about 380 when I last heard - but that was a few months back so she probably has quite a few more by now!
Ian
By Ian on Apr 11, 2008
Hi Again Ian,
This is another very interesting cash flow in the property market,
Ian can you please advise how you would get started, and learn more in regards to this.
Regards Tony
By Tony on Apr 15, 2008
Hi Ian,
Are property wraps the same as “rent to own” or “Sandwich leasing”??
This strategy is what I am really interested in getting into and would like to know a little bit more and how it can be implemented to NZ law, so that I can get started as soon as possible in Auckland NZ?
Thanks
Regards
Jenny
By Jenny on May 27, 2008
Hi Jenny,
Wraps are based around having one mortgage “wrapped” around another one.
Rent to own is (usually) achieved through a rental agreement and an option to buy agreement connected together - usually referred to as a Lease Option.
Sandwich leasing is (usually) where one Lease Option is wrapped around another one. So you purchase the property with a Lease Option and you on-sell it on the same basis.
For a Wrap and a Rent to Buy, you would buy the property in the normal way but on-sell it in a different way (either by acting as the bank or by giving a Lease Option). For a Sandwich Lease you would also buy the property using a Lease Option.
So, technically, these are different things. However, the goal of all of them is similar. And that is to enable somebody to purchase a property when they are not able to do it in the “normal” way. And, as the investor helping somebody to do that, you make some money along the way.
There are pros and cons of each method. But I do not believe that any one method is actually better than any other - they are just different.
In Australia, there are some restictions on Wraps. For instance, I believe that South Australia does not allow them. I do know of people who Wrap properties in New Zealand - including one lady who has wrapped over 500! I’m afraid that I know less about the other ways (we wrapped properties ourselves).
My suggestion would be to go to a good property solicitor near you and talk it through with them as they will be able to guide you better on what will work best where you are.
I am happy to chat to you about it on the phone if that would help - just give me a call on 09 889 2055 (evenings are the best time to catch me!).
I hope that helps.
Ian
By Ian on May 27, 2008