During the last few years I have met many people who are struggling financially. The cost of living has risen, house prices have dropped and many jobs have disappeared. None of these people really had that much in common, in fact they presented with many different stories. Some were retirees living off a reduced superannuation, some were Mum’s and Dad’s with kids to raise and mortgages to pay, and others were people who owned one or more investment properties but who were going broke covering the costs. There were even the smart investors who were looking for a more profitable way to utilise their equity and gain immediate cash flow, as well as long term benefits. Their stories all varied, however one common factor was that they could all use Vendor Finance to solve their problem.
Vendor Finance is not a widely understood strategy, and although it has been around since the 1800s it has mainly been used to buy and sell commercial properties. Over the last 15 years it has become a little more common place with residential buyers and sellers, despite being plagued with stories of scams and being badly represented by the media in general. In fact, Question 56 of the last Australian Census, which asks you to specify your living arrangements, offered rent to buy as an option alongside rental and mortgage. This shift, despite the negative image, has seen more and more buyers and sellers turning to it as a viable solution to their problems.
So why does it have a negative image? Well, Vendor Finance is a tool and like any tool, when used correctly it can work wonders, but when used incorrectly, it causes problems. Take a hammer for instance. When used by a builder, it can transform pieces of timber into a house. But when used by a vandal, it destroys things. Same hammer, different outcome. But you don’t blame the hammer do you? Vendor finance is no different and when used correctly, it can not only relieve financial pressure, but in many cases, outperform other methods of investing.
Take Wendy for example. Her husband had tragically passed away earlier in the year, and she had decided to sell her home and move back home so she and her four children could be closer to her family. The only problem was, her house didn’t sell. She had listed it with an agent but only received offers below what she needed. She didn’t really want to rent it out, as the rent wouldn’t cover her mortgage payments, but what choice did she have? Wendy phoned me, and after discussing her needs, I put together a plan that enabled her to sell the property as a rent to buy, which covered all her costs, gave her a monthly income, and on settlement, will pay out her home loan and give her a lump sum for the equity she had already built up in the property. And best of all, she didn’t lose any money paying a commission.
Now, is it possible that if someone else put a plan together for Wendy, that it might look a little different? Of course! Someone once said that there are over 300 different ways to wash dishes, so it stands to reason that the plan I put together would be different to the plan someone else puts together. The difference between what I do and what many other vendor financiers do is that I focus on the needs of my buyers and sellers, rather than on the amount of money in the deal. By focusing on their needs, I am able to create positive solutions for everyone involved.
So if you, or anyone you know, would like to discuss whether vendor finance could be the tool for you, I now provide free consultations, in person or over the phone, to everyone referred by Little Shoppers.
Contact: Deborah Forbutt – www.propertyconverter.com.auMobile: 0438 744 165 Email: firstname.lastname@example.org