All Topics / Help Needed! / How Would you Fund and setup the Below Investments!!!

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  • Profile photo of JpcashflowJpcashflow
    Participant
    @jpcashflow
    Join Date: 2007
    Post Count: 575

    Hi Every One,

    Cash flow has improved for my wife and I. In the last couple of month's and we are working on ways to improve this.
    By February my wife and i will have another source income comming in. 
    With this extra income we want to invest and turn "investments into real bussiness".

    When i first started investing i used to rush from all of the excitment. I know want to foscus and become wealthy.
    I have done allright so far but being just comfortable in life is not enough for me. At 27 there is no better time to start.

    So i have a couple of questions:
    1) Setting up a form of structure: If i am looking at alot of investments do you know this up as some sort of Trust or just under your name? My accountant has suggested that either will work and both have Pros and Cons.

    2) Funding for both Shares and property/Land: To start off again do i use the equity in my home or save and use my own funds.
    Since its my home i should maybe save so i can leave my PPOR in good shape i currently own $100,000 its worth about $410,000.

    3) I have some bussiness goals that i am focusing on next year if any one wants to have a glance at these please let me know i think it always great to share ideas with people who think alike.

    Cheers
    Johann Psaila

    Jpcashflow | JP Financial Group
    http://www.jpfinancialgroup.com.au
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    Your first port of call in finance :)

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hi Johann

    Good to hear things are on the improve.

    Looking at your numbers i am assuming with a property valuation of circa $410,000 and $100,000 in equity you have an existing loan of around $310,000. Unfortunately there is a big difference between actual equity and useable equity.

    Think you will find it hard to find any lender go past 90% lvr so if we assume $410,000 x 90% = $369,000 – existing loan of $310,000 that is going to give you around $59,000 to work with.

    Rather than use any of your personal savings i would be looking to pay down the principal on the home loan and then increase the equity loan or LIne of Credit by an equivalent amount so you can maximise your deductible interest.

    Not sure whether the new income in Feb is going to be used to support the existing borrowing but will depend on what it is as to whether lenders will accept it.

    Might be an idea to get the structure in place now in readiness for what you intend to do early 2012.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    If starting a business asset protection should also be a major concern.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of JpcashflowJpcashflow
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    @jpcashflow
    Join Date: 2007
    Post Count: 575

    Hi Terry and Richard,

    "Looking at your numbers i am assuming with a property valuation of circa $410,000 and $100,000 in equity you have an existing loan of around $310,000. Unfortunately there is a big difference between actual equity and usable equity."

    My home loan Is $100,000 and the valuation is at $410,000.

    The new source of income is coming  from my wife going back to full time work as a drafter.
    So by February we are going to have three sources of income:
    1) My Full time work – Earn 75K a year
    2) My wife income – Earning about 60K a year
    3) Our  business will  also provide an income –  We have almost set this up so that my business can pay for my home loan and genera living expenses.

    So we are going to be in a pretty good position  considering we  dont have much debt

    Jpcashflow | JP Financial Group
    http://www.jpfinancialgroup.com.au
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    Your first port of call in finance :)

    Profile photo of TerrywTerryw
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    @terryw
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    hi Johann

    Usable equity would be [$410,000 x 80% (or 90% maybe) ]- existing loan.

    You should be able to pay out that $100,000 in less than 2 years.

    For the business have one person operating it only, to reduce risk, and further reduce risk by using a Pty Ltd company. The company can employ the other if need be, or have the shares owned by a DT so as to add tax flexibility.

    Not sure how you are doing that with the business – paying for the home and hope you have sought advice. if the business is leasing part of the house then the CGT will be lost.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of JpcashflowJpcashflow
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    @jpcashflow
    Join Date: 2007
    Post Count: 575

    Hi Terry,

    The business will have one person operating it and its under a PTY LTD structure.

    100k in two years – Do you think it may be more sensable to pay of the home rather then invest?

    Cheers

    Jpcashflow | JP Financial Group
    http://www.jpfinancialgroup.com.au
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    Your first port of call in finance :)

    Profile photo of TerrywTerryw
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    @terryw
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    Do both.

    Def any cash received should be paid off the home loan rather than straight into an investment – or into an offset and then borrow to invest, if you have enough equity.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of JpcashflowJpcashflow
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    @jpcashflow
    Join Date: 2007
    Post Count: 575

    Thanks for that Terry

    Finally all the hard yards are starting to pay off.

    Future looks bright

    Jpcashflow | JP Financial Group
    http://www.jpfinancialgroup.com.au
    Email Me | Phone Me

    Your first port of call in finance :)

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
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    Agree with Terry i cant see why you cant do both.

    You threw me when you said "I own $100K" as i assumed that the Bank owned the rest.

    Set your loans up correctly and the equity should give you a good launching pad going forward.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of JpcashflowJpcashflow
    Participant
    @jpcashflow
    Join Date: 2007
    Post Count: 575

    Thanks guys.

    Speak soon its all good from here then.

    Jpcashflow | JP Financial Group
    http://www.jpfinancialgroup.com.au
    Email Me | Phone Me

    Your first port of call in finance :)

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
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    Just make sure you focus and don't get sidetracked from your plan.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of JpcashflowJpcashflow
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    @jpcashflow
    Join Date: 2007
    Post Count: 575

    Hi Terry,

    That usualy happens to me any tips to remain focused?

    Jpcashflow | JP Financial Group
    http://www.jpfinancialgroup.com.au
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    Your first port of call in finance :)

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
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    Just develop a plan and stick to it. When your mate comes over and tells you how he could make $1mil by investing in x – beware.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
    Post Count: 12,024

    And dont take advice from friends down the pub who tell you "I think the ATO are investigating Trusts" or "My friend at the Bank recons managed funds is the way to go and he has a mate who can get you into the fund".

    These friends spend 40 years telling you all the reasons why you shouldnt take action and then on retirement want to come and stay at your place and enjoy the riches of your investing.

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    Qlds007 wrote:
    And dont take advice from friends down the pub who tell you "I think the ATO are investigating Trusts" or "My friend at the Bank recons managed funds is the way to go and he has a mate who can get you into the fund".

    These friends spend 40 years telling you all the reasons why you shouldnt take action and then on retirement want to come and stay at your place and enjoy the riches of your investing.

    Cheers

    Yours in Finance

    Well put Richard.

    And then these friends will also talk about you behind your back saying how 'lucky' you were because you invested in xxx

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of JpcashflowJpcashflow
    Participant
    @jpcashflow
    Join Date: 2007
    Post Count: 575

     Thats so true!!

    But like you both said just focus and i will have no problem.

    Richard your the guru with lending if you have some time can i shoot you a email of some goals i want to try and reach within the next couple of years and see if you can help me structure loans etc?

    cheers

    Jpcashflow | JP Financial Group
    http://www.jpfinancialgroup.com.au
    Email Me | Phone Me

    Your first port of call in finance :)

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544
    Terryw wrote:
    And then these friends will also talk about you behind your back saying how 'lucky' you were because you invested in xxx

    As Terry says often there is very little luck involved – it is all about education, planning, commitment and having the courage to make a decision.

    So many times I hear you were lucky because you bought at the right time – bulldust – the trust is someone had the courage to make a decison based on sound fundamentals. Luck has very little to do with it.

    Profile photo of JpcashflowJpcashflow
    Participant
    @jpcashflow
    Join Date: 2007
    Post Count: 575

    Hi Derek,

    I agree with you too.

    I have so many young friends and all they say is this: Life is hard, oh its so expensive we never have any money to invest.
    They they say next week they bought a new car on a lease, new furniture etc.

    Every one in this planet has the same chance of being sucessfull but the truth is alot of people would rather admit defeat then fight.

    Jpcashflow | JP Financial Group
    http://www.jpfinancialgroup.com.au
    Email Me | Phone Me

    Your first port of call in finance :)

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Deleted as i seem to have repeated myself over and over again lol

    Richard Taylor | Australia's leading private lender

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