[Albert WaldronParticipant@albert-waldronJoin Date: 2009Post Count: 7]

February 12, 2015 - 9:55 am

Hi Mike, – talk to lots of professionals who invest.. not just an accountant.. I am currently assisting a client whose accountant gave him reasonable accounting advice but sent him in completely the wrong direction and the result is he is now considering selling his entire property portfolio, again on his accountants advice. When in fact what he needed some better advice on the right properties to purchase in the first place. Sorry but 50 year old houses in country towns might look good on a quick cash analysis that shows positive cash flow (what his accountant did for him) but it is not the whole picture. When you consider the lack of capital growth, lack of the ability to add value and ongoing maintenance costs the picture starts to look completely different. Build a team of property expert – Accountant – Real Estate – Finance – Legal services

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[Albert WaldronParticipant@albert-waldronJoin Date: 2009Post Count: 7]

February 10, 2015 - 11:10 am

Wow how the world of lending to Superannuation funds has changed in the last 10 years

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[Albert WaldronParticipant@albert-waldronJoin Date: 2009Post Count: 7]

February 10, 2015 - 11:06 am

Hi Mic, Yes, I have done a few 7 & 10 year fixed rate loans but to property investors who where heading overseas for extended periods. I think Australians are happy to take a bit of a gamble on interest rate because they believe rightly or wrongly that in the long run variable interest rates will average out lower than the comparable fixed rate.

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February 10, 2015 - 10:38 am

Hi James, Terry is right – investing in trail books can be a risky thing and while you can put in contractual obligations with the seller against things like clawback it can still be difficult. I would suggest teaming up with a mortgage broker and paying them a small cut of the trail to help manage the book and any refinances. As long as you stay in touch with your client on a regular basis and offer some genuine additional value over the next guy you should be able to limit the trail book losses. I do this service for a accountants firm at the moment where they purchased the loan book to get access to the clients for accountancy work. I look after their client for a small fee per month. If the client needs a new loan I keep the upfront but the trail goes back to the accountant. It was fairly simple to set up.

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[Albert WaldronParticipant@albert-waldronJoin Date: 2009Post Count: 7]

February 2, 2015 - 4:13 pm

Hi Fudge111 –

You are correct in your assumption that the rules that whichever owner/ borrower was directed the rental income or negative gearing tax deductions would by default also be the same owner/ borrower that the capital gain would need to be applied to once it is sold.

The best way around this would be to look into a Discretionary Trust and have it borrow the money. Both incomes are used to assess serviceability with the lenders. But you would then have the discretion to distribute the income (not loss – negative gearing) to whom every was a beneficiary of the trust.

The down side is because the loan is in the name of the trust, any losses i.e. negative gearing is trapped in the trust. But with Fixed interest rates of 4.98% or less for 5 years available from several lenders it shouldn’t be too hard to find a property that has only minor negative gearing.

There are people who will try to achieve the negative gearing in a trust by offering you a hybrid trust but the same problem as owning it in your own name exists in that you need to own the units in the trust and the end result is to negate the flexibility of the discretion.

Regards Albert

• This reply was modified 9 years, 3 months ago by  Albert Waldron.

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February 2, 2015 - 3:58 pm

I think the most important thing is to get everyone in a room together and talk about the upside and the downside.
Why do the Aunty and Uncle want to help out, and what the downside if something goes wrong.
They are a great asset protection method where people want to help out a newly ‘married/defact’ couple and protect their assets should the relationship break down.. I.E Aunty and Uncle should get their guarantee extinguished rather than trying to recover a cash gift. But it’s important that everyone knows what will happen if something goes wrong an the property falls into default.
On the lending side the main thing is for Aunty and Uncle to has income to be able to service their current debts and the guarantee debt if it gets called. That way in the worst case Aunty and Uncle can still afford to service the total debt.
I actually find these really good where parents want to help children over time where the eldest purchases first, so a traditional ‘gift’ deposit’ isn’t really fair due to rising house prices.

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[Albert WaldronParticipant@albert-waldronJoin Date: 2009Post Count: 7]

January 7, 2009 - 11:58 am

This is my first post so I hope I don't offend anyone.

The issues that usually arise when using the Chan & Naylor "Property Investor Trust" generally comes down to the quality of the mortgage broker or finace person you are dealing with.
 
Writing loans everyday for clients who are using the Trust for various reasons I do a lot of work "educating" and working with credit teams of many of the Banks. Generally it is no harder than getting a non trust loan approved once the ground work has been done and the right people are involved.

I am sure the other experienced guys would agree that when you have something like a trust or any other out of the box issue involved you need to be providing a greater level of information and explanation. For a person new to the industry or working in a Branch front counter who may have literally only a few weeks experience they may have no idea what a Trust is our how it works.

Most lenders are much happier to lend to PAYG first home buyers and work on a "fit it into a box" low cost model so that anything "out of the ordinary" is passed around until it finally ends up with the experienced guy .

ASK ASK ASK the broker or person you are dealing with some basic questions like; how many trust loans have you written? What is a appointor? What is the difference between a discretionary trust or hybrid trust?
If they can't answer you straight away, find someone who can.

Albert Waldron | Awesome Lending Solutions
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