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01 May 2003

Wary About Vendor Finance (WRAPS)

Neil Jenman’s story

Let me tell you about Erwin.

Erwin used to help me fix-up houses back in the 70s. He was a German migrant who worked at the Borg Warner factory in Fairfield as a machinist. His wife, Helga, was a process worker. Each afternoon, after Erwin finished work, he’d help me renovate houses, often working until midnight. And then he’d go home. Next day he’d get up at dawn to go to the factory. Each day, the cycle was repeated. Factory, renovate, sleep, factory, renovate, sleep.

Erwin was renting. His dream was to buy a few acres for a market garden. The money he earned with me (which I did not have to pay until the homes were sold) he was saving to use as a deposit. We were both struggling back then, but Erwin always told me I could pay him “whenever and whatever was fair”.

One day, he saw an ad for a five-acre farm at Llandilo. It was owned by a lawyer who was offering “vendor terms”. Erwin bought it on a low deposit and then made repayments to the lawyer.

Erwin was so happy. After 15 years in Australia he had his dream. Over the next two years, whenever he was not working with me or at the factory, he was out at his farm building a home. He poured his money, his energy and, most of all, his heart into it.

Finally, the home (cheap and rough) was finished. I will never forget that night when, after a day’s removal work, we were all sitting around a fire at Erwin’s farm. Helga and the two children, Gabby and Jorge, were just as excited. Success in the lucky country.

Putting his arm around me, Erwin said, “Thanks mate, I could not have done this without you.”

A few weeks later, a letter arrived. It was from a bank, addressed to “the occupier”. The letter said that Erwin was an illegal occupier. He was given 14 days to be off the property.

You see, while Erwin had been paying payments to the lawyer, the lawyer had not been making payments to the bank. Erwin lost everything. It is one of the saddest stories of my life. It still haunts me today. I feel I should have helped him. But these were the days before I really understood real estate – and certainly the dangers to people like Erwin.

Anyway, ever the optimist, Erwin just started again. The factory in the day time and part-time work at nights and weekends. Whatever he could get. He knew the formula and he was still young.

In ten years, he had enough to buy another farm. This time it was a couple of hundred acres at Mudgee. He moved up there and called me to come visit. I promised I would.

A few weeks later, as he was opening a gate one evening, he had a heart attack and died.

Erwin was 54. I loved him. As another friend is fond of saying, “He was one of us.”

This is why I am wary about ‘wraps’.

Neil Jenman, May 1 2003

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