Vendor Finance/WRAP companys in QLD

Hi

Im just wondering if there are any reputable companys in QLD that can take care of vendor finance.

I have property in QLD, that Im thinking of offering to my current tenants(or other potential buyers) as a vendor finance or wrap deal.
Im looking for a company to take care of the whole deal.. and also continue looking after it, much like a property manager does.

do companies like this exists?

any one had experiences they could share?

Regards

Kelvin
 
Hi Kelvin

We have done this many times, including in Qld. We call it our "negative2positive" system.

We also have a specialist vendor finance loan administration company, called Vendor Finance Management Pty Ltd.

Sandra, in the Testimonials area of our website, is a negative2positive client.

Cheers, Paul
 
We established a specialised Wrap Company in Qld in 2000 called First Home Owners Group.

We only wrap and finance our own deals but I am more than happy to answer any questions you might have.
 
hi all
was looking for a vendor finance post to ask
what will the new laws with regards private funder being registered do to vendor finance and have or will they die out now
whats the views of people here
 
Vendor Finance Institute

Hi grossreal

Here is the contents of a report we normally send out via a Vendor Finance Institute website:


Vendor Financiers and the Australian Credit Licence​

Registration for the Australian Credit Licence

Registration for the Australian Credit Licence (ACL) closed on 30 June 2010. The Registration process allowed current Vendor Financiers to continue to operate their Vendor Finance business until 31 December 2010.

Businesses that Registered prior to 30 June, then have from 1 July 2010 to 31 December 2010 to make a full Application for the ACL.

Do I need an ACL?

The new National Credit Act requires anybody who is “in the business of” providing consumer credit or consumer credit advice, to hold an ACL

1. You do not need an ACL if you only plan to utilise Lease/Options.

2. If you plan to regularly use Instalment Contracts and/or Second Mortgages in your vendor finance (VF) business, you need to be an ACL holder or an accredited Representative of an ACL holder.

3. Even if you only plan to use an Instalment Contract and/or Second Mortgages once or twice a year, it is advisable to get ACL coverage for your Instalment Contracts and/or Second Mortgages, as the new National Credit Code does not clearly define the meaning of “in the business of …”.

If You Registered

If you Registered before 30 June 2010 you may continue your vendor finance business under this Registration until 31 December 2010. This gives you from 1 July 2010 until 31 December 2010 to apply for and gain an ACL, or alternatively, become an accredited Representative of an ACL holder.

While operating your VF business under the authority of a Registration you must ensure you operate within the rules and guidelines of the new National Credit Code (NCC).


If You Did Not Register

Registering for an ACL is no longer available. If you didn’t Register for an ACL before 30 June 2010 and you wish to operate a vendor finance business that needs ACL coverage, you have three options:

1. Become an accredited Representative of an ACL holder or ACL Registrant. (An ACL Registrant will have to gain an ACL to operate their business, after 31 December 2010.)

2. Enter into a Joint Venture with an ACL Holder or ACL Registrant for a specific transaction that requires ACL coverage.

3. Apply for an ACL from ASIC. You should ensure that any transactions requiring ACL coverage are not undertaken until you gain your ACL or have ACL coverage via points 1 and 2 above.

Not “in the business of …”

Nothing in the new National Credit Act requires you to hold an ACL to provide credit for the sale of your own property(s). However all sections of such a transaction must be structured in accordance with the requirements of the new NCC.

This includes the pre sale checks you must carryout, ensuring the Contract documentation complies with the new NCC and that the on going administration of the resulting loan complies with the new Code.

While an ACL may not be mandatory in this situation, it may leave you open to non compliance with the new Act, if you do not get advice and assistance from an ACL holder or Registrant.


ACL Courses

Vendor Finance Institute Pty Ltd will soon commence courses to assist Vendor Financiers gain their ACL . The “ACL Application Course” will run for four days and is designed to have you ready for a full ACL application upon its completion.

The aim of the Course is for you to complete a Certificate IV in Financial Services and have sufficient tools, policies and manuals in place, at Course completion, to allow you to complete the ACL application.
.
Course timings will be released soon.


My feeling is the ACL will make the Vendor Finance industry much more accountable, will help to remove any remaining "cowboys" and build a solid foundation for the future growth of the industry. Thanks.

Cheers, Paul
 
Last edited:
thanks
looks very difficult to do vendor finance in a single entity if you wish to buy a house reno and then vendor finance back
is this your view
if you are a corporate thats fine but if you are a developer or a multi land owner and you wish to push product this will and is stopping taht at this stage as you have to conform via legals
and for me I see a large issue here and have not heard alot about it
 
Hi grossreal

"looks very difficult to do vendor finance in a single entity if you wish to buy a house reno and then vendor finance back". When you sell a property via Vendor Finance, you've always been required to administer the resulting loan. Something that was very scary to us when we started out in VF, i.e. it wasn't mentioned at the seminar ;-)

However I see it getting easier in the future, with the arrival of specialist vendor finance management companies such as:
http://www.vendorfinancemanagement.com.au
I declare an interest here, i.e. VFM is our company.

In your example above, I see the following scenario becoming more popular:
(1) The VF seller goes into a joint venture with an ACL holding specialist VF management company, for anything more than say $1, to ensure the credit is provided according to the new National Credit Code (NCC).
(2) After the sale, the VF seller enters into an arrangement with the VF specialist company to administer the resulting loan.

To date many VF sales have been setup outside the requirements of the old UCCC, e.g. I've seen Instalment Contracts with the relevant UCCC section completely missing. With a JV as outlined in (1) above I believe the VF seller can get on with his/her business, confident they're providing credit as per the NCC.

The arrangement mentioned in (2) above off loads loan administration to the specialist management company. And the cost of this administration can be passed on.

While I'm biased because we own VFM, as a vendor financier I now love not wasting hours in front of the computer each week administering loans.

May I suggest you visit a Vendor Finance Association meeting to gauge the general feeling of the membership, to the new NCC. I've found it to be very positive. Meeting locations and times can be found at:
http://www.vendorfinance.asn.au

Cheers, Paul
 
hi lofty
want the cost of say a 400k property where there is 30% vendor finance back
just because you have an interest is fine by me
we all need to make an income
 
Hi gross

The second part of the process is easy, i.e. Vendor Finance Management P/L charges 4.4% (including GST) of money collected to administer the loan. Plus a monthly admin fee of $4.40.

Selling a property with what we call a Second Mortgage Carry Back is getting harder these days as most of the traditional 1st mortgage lenders are requiring proof of funds to close and savings histories.

Obviously, if you are going to manage the provision of the 1st and the 2nd mortgages, we need to do less. If we need to be involved in getting the 2nd across the line, then we need to do more.

If you could PM me with your requirements regarding who you'd like to do what, that'll help us understand what we need to quote on. Thanks.

Cheers, Paul
 
Back
Top