Rent To Buy: Bootcamp Highlight Notes

These notes were taken whilst listening to a webinar from Rick Otton who was discussing the highlights from one of his bootcamp seminars.

• Webinar is being recorded (TODO: get the recorded version)
  
• Life is limitless!!!
• The only limits in life are those that you set yourself...anything is possible - if you haven't done it yet, you just haven't found the processes' and/or tools.
• Rick consults with "powers to be" (implying government officials etc) in regards to "what is happening" and continues to state that the Census has an option: "are you purchasing your property by: a) ... b) ... or c) A Rent To Buy Scheme
• Indicating that this is becoming so popular that it is bound to be the way forward...

• INSTALLMENT SALE aka TERMS CONTRACTS aka VENDOR FINANCE
• Allowing the sale of a product via installments
• nb: "The Block" the TV show was bought using an installment contract or 'vendor financing'
• Has delayed settlement and a monthly payment schedule between settlement date and exchange
• A lot of students will just use this method and nothing else
•  
• HANDY MAN SPECIAL
• Most people would love to do the Reno themselves (design the way they want)
• Happy to pay full price
• As long as you make it easy to purchase the property in the first place
• Buyers has emotion and energy invested in teh property

With these two strategies you're relaly just a stepping stone into the mainstream banking system..."don't look at me like a bank...but rather, look at me as the ladder to get you into the banking system"

Allows people to get their credit back in order.

Can show lender their ability to make payments on time.

LEASE OPTIONS - RENT TO BUY (not Vendor Finance as it's not a Finance contract)
Can if they want to, buy the property but they dont have to!
They don't pay stamp duty or legal fees.
Easy paper work
Residential lease and the option.
The option gives them the right but not obligation to buy
Give money up front, this goes to the property purchase
They could even transfer that into another property down the track if they want something else

Three Documents Required to do this strategy
1. Option to buy
2. Residential Tenancy Agreement (can buy these at a newsagent)
3. Contract for sale

If looking for solicitor (to draw up these agreements)
Use a commercial solitior as they have more experience with these documents

BACK TO BACK LEASE OPTION
Lesae option with the seller
Lease option with the buyer
aka sell the option you got from the seller to the buyer
You are now transacting the right to buy the property...
They don't attract any taxes or stamp duties until ownership
Mcdonalds starting doing all these lease option.
Lease option for land
Lease option to the franchise owner
Made money on arbitrage between the options. More detail in the book: "beneath the archers"
Buy a house for $1 this way!
Lunar Park went for a $1
Volvo went for a $1

Nobody wants their Debt Bit, everybody wants their Cash bit!

Sometimes won't always get it for $1 sometimes $1,2,3,4,5K

AJV Assistant Seller
JV with the Seller
Go to the market and split the profits 50/50
Assumptive Joint Venture (with a person that is in a property)
1 person brought the money to the table and the other person does all the transacting ( make the transaction seamless)

Deposit Finance
Recognise that the buyers don't have deposit
Buyer borrows as much, vendor lends them the deposit.
You buy property. Ultimate buyer buys property, and gives you monthly installments for the deposit. you then take the mortgage to the next property and continue the cycle...

Some Now Some Later
Make offers to RE Agents - give some now and bit more later
Agent: "how much can you give now?"
Give large sum of money to vendor to begin with - normally comes out of the mortgage
Vendor may get it later with interest (eg 5 yrs time with interest all in one payment at end or with monthly interest installments) sometimes needs stepped interest rate. Depends on what you need to do to bring the whole thing together.
By the time you need to give the rest of the money to the vendor, you've on sold the property to the next person.

Getting Started
Choose your areas.
Just go and start speaking to everyone in the game:
Solicitors, Accountants, Real Estate Agents, Buyers Agents
Internet: Google Videos for the strategies
Let it become a part of you...think it, feel it, breath it, live it!
Start small:
1. Call 3-5 agents
2. Let the agent know what you're trying to do

Which strategy if you have no money
Back to Back
AJV
Installment Contract (then get an investor to come in with the $ and then give the investor 50% of the profits)

What to do if you have Negatively Geared Property
Rent2Buy
Change from Rent to Rent-2-Own
Current tenant may not want to change (they'll be paying a lot more than they're used to)
Give the current tenant a share of the $ as an incentive to help sell the property to prospective new tenants
Installment Contract

What if you have Fear/Lack of confidence