Vendor Finance

Vendor Finance

PASSIVE INCOME STRATEGY

Case study of a vendor finance strategy we used to generate passive income into our property portfolio.Over a 2 year period starting with $5,000 in working capital. Proven results that property investors can use themselves.
 

What are Vendor finance contracts or vendor terms contracts?
 

It is a confusing title that pops up around the property circles every now and again and is very grey area.

Basically a sales contract, with “special terms” inserted into the body of it, that comply with State legislation and the consumer credit act.

The “special Terms “ the details are the purchaser's obligations to making payments of paying off the property:
 

  • Deposit amount weekly or monthly amount
  • Annual costs
  • Interest charges
  • Default or arrears


Every state has different laws and it is important to check the laws pertaining to each state, and ACL licences ( Australian credit licences) may be required if there is interest being charged currently 2020 Vic and SA laws prohibit terms contracts, QLD, NSW and WA are legal.
 

Pros:

  • High cashflow from minimal cash outlays with passive income
  • Client pays councils rates and outgoings.
  • Low default risk ( vendor retains title in office).
  • Increases larger demand for property purchases and opens up a larger market.
  • Deposits can cover acquisition costs if purchased at a very low price.
  • Unpaid rates auctions are great for this strategy.


Cons:

  • Must be highly organised and responsible to the purchaser.
  • Solicitor preparing paperwork can be expensive to set up.
  • Exchange of contracts can be only be achieved by yourself.
  • ( solicitors don't like them)
  • The client stops paying and you have to resell the land.

Strategy

 

“From little things, big things grow”

Completed deals/case studies

Listed below are actual deals, with marketing content we compiled a small sample number we have completed using this strategy to make passive income for over 6 years.

Case study 1) : Website category unpaid rates/sheriff auctions


‘Walgett NSW Shire council unpaid rates auction 2015”
 

Purchase cost: $1,000. Sold $12,000 ( market value) Notes:
Purchasers Deposit paid for the initial cost of the block of land.
$70 a week income from zero capital outlay over 3 years.
 

(Advertisement)
2000 m/2 $70 a week payment plan

 

54-56 CHURCH STREET, COLLARENEBRI
Double block 2000 m/2 or half an acre in town, Represents great value for money, just reduced from $15,000 saving of $3,000.
All services are available; Power, water, sewer, with a few scattered trees.
Zoned village for building, flat land.
Hold for long term investment, camp, weekender from Sydney, extra storage, get into the property market now, no bank qualifying;
$1,000 Deposit
No interest, no credit charges, no upfront legal, $70 a week
 

Case study 2: Website category unpaid rates/sheriff auctions


Walgett NSW Shire council unpaid rates auction 2015”
 

Purchase cost: $2,000. Sold $12,000 ( market value)
Notes: Purchasers Deposit paid for 50% of the block of land.
$60 a week income from $1,000 capital outlay over 3 years.
 

(Advertisement)
Vendor finance 1000 m/2 $60 a week


29 ALBERT STREET, COLLARENEBRI
Phone enquiry code for this property: 3329


Land is 1000 m/2 zoned village, building entitlement, power, water, sewer all available ready to go.
Collarenberi is a small regional country NSW town of approx 300 people. 3-4 hours nth west of Dubbo.
Flat land, with no easements. Great opportunity to get into the property market.


$1,000 deposit
$60 a week.
No interest or credit charges or upfront legals.
No bank qualifying.
Pensioners, low-income earners, bankrupts all welcome


Case study 3): website category double blocks/ multiple lots


Rosebery Vic x 7 Multiple crown lots purchased as a whole 2015”
 

Purchase cost: $15,000 ($2,142 each block).
Sold $49,000 ($7,000 per block)
Notes: Purchasers Deposit paid for 50% of the block of land.
$280 a week income from $8,000 capital outlay over 3 years.


(Advertisement)
2000 m/2 $40 a week payment plan

 

LOT 9 LASCELLES STREET, ROSEBERY
Phone enquiry code for this property: 3905
 

Just over 1/2 acre of land, flat, power available. Zoned farming so no building entitlement.
2 road frontage to Henty why and Laceless st, Rosebery.
Shed are permissible under 100 m/2. ( farm use only).
 

Great for weekend use to get away from the rat race of Melbourne, located 4 hours drive and 1 hour to Horsham.

Uses (STCA): Camping, shed, storage, livestock, agriculture, pursuits i.e: Olive farm, protea farm, lavender farm, nature hobby pursuits.

Over 7 lots to choose !!!

$1,000 Deposit. $40 a week. No interest.No bank qualifying. Great opportunity to get started into the property market and build equity from Day 1 !!! "Who can't afford $40 a week".