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What is Vendor Finance

Updated: Feb 29

Also known as Property Wrapping or Wrapping a House

Vendor financing benefits those aspiring to own a home while providing the investor with a means of generating positive cash flow.

Vendor financing essentially entails an investor assisting a potential homeowner (the Wrappee) in acquiring a house. This is especially helpful for individuals facing loan challenges or difficult circumstances that hinder their eligibility for a standard bank loan.

Vendor Financing is when an investor of a house finances a potential homeowner into a house.  | Aussie Wrapper

The Investor (the "Wrapper") then sells the property to another individual (the "Wrappee") using an agreed-upon instalment plan spanning a set period. The Wrapper buys the property under their name and sells it to the Wrappee at a higher price, granting them a more extended time for payment. The Wrappee's mortgage wraps around the Wrapper's mortgage.

This approach allows the Wrappee to make payments in installments over multiple years until they become eligible for a traditional bank loan and can refinance the property.

What is wrapping a house | Aussie Wrapper

Legal and beneficial

This legal financing method can be of immense value to potential homebuyers who don't meet the criteria for a conventional loan. The Wrapper, acting as the lending facilitator, isn't bound by strict income or credit prerequisites. Nevertheless, a credit check questionnaire for the Wrappee is addressed in the Aussie Wrapper Complete Guide on page 60.

Through Vendor Financing, even in a competitive real estate market, prospective homeowners now have an opportunity to attain homeownership.

The Wrapper benefits significantly from this system as well, generating positive cash flow and experiencing the satisfaction of aiding honest families in their journey to eventually refinance and secure their own homes.

The original mortgage and the title remain in the Wrapper's name, and the Wrapper continues to make payments on his mortgage.

This is all explained in The Aussie Wrapper’s Complete Guide on pages 10, 11, 12.

In which Australian States and Territories can you practice Vendor Financing?

Vendor Financing is legal in New South Wales, Western Australia, Australian Capital Territory, Northern Territory and Tasmania.

Vendor Financing in Five Simple Steps

Watch my video on How Property Vendor Financing works.

I explain the whole process in Five Simple Steps (watch from 0:35). I also give a simple example of a case study (watch from 1:03)

Here's a Free download - Property Cashflow Property Investing Secrets

Get started with understanding vendor finance with this free download.

To Your Success Paul Zalitis The Aussie Wrapper


About Paul Zalitis, the Aussie Wrapper

What I’ve been doing is helping mates create positive cash flow and helping them achieve their dreams of owning property and building their finances through Property Vendor Financing.

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