[Shane WParticipant@shanewebbJoin Date: 2016Post Count: 17]

July 25, 2016 - 1:38 pm

Hi Terry,

Have you read the book “Family Trusts – A plain English guide for Australia Families” by N.E. Renton and Rod Caldwell?

If so, would this book be any use for protecting assets in a trust?

I would like to sit down with someone in Melbourne to advise and set up a structure for me. Do you have any recommendations for someone to help me in Melbourne?

Many thanks

[Shane WParticipant@shanewebbJoin Date: 2016Post Count: 17]

July 25, 2016 - 1:20 pm

Hi Brizza,

I have been talking to a mortgage broker to set up a 95% loan. This would be a loan for 93% of the property value and capitalising the LMI into the loan, bringing it to 95% LVR.

Unsure if you can borrow 95% of the properties value and capitalise the LMI on top of this.

Cheers

[Shane WParticipant@shanewebbJoin Date: 2016Post Count: 17]

June 14, 2016 - 3:36 pm

Any reccomendations for property tax accountant in Melbourne?

Must be a specialist in property accounting and asset structuring.

Also: what do you look for in a good property tax accountant? How do I know I am getting the best advice?

Many thanks

[Shane WParticipant@shanewebbJoin Date: 2016Post Count: 17]

June 4, 2016 - 7:30 pm

I am from Point Cook. Only a short drive to Melton.

I have wanted to play this game since I read Rich Dad Poor Dad.

Very keen to have a game!

[Shane WParticipant@shanewebbJoin Date: 2016Post Count: 17]

May 31, 2016 - 5:33 pm

Interested!

[Shane WParticipant@shanewebbJoin Date: 2016Post Count: 17]

May 14, 2016 - 10:23 am

The business structure is out of my league but it is an interesting post I couldn’t help but comment.

I have also read all of Steve Mcknight’s book and taken in a good deal of information. May I suggest that you also have a look through some different property strategies such as Michael Yardney’s book ‘How to build a property portfolio in your spare time”. It takes a look at property investing through a different strategy based on capital growth.

Lots of things to consider with the business idea
-How much money involved with renovating/buying and selling fees, capital gains, time taken to renovate ect.
-How much needs to be done to the property to add value – You don’t want to over capitalise
-Working in conjunction with your mate – How are the profits distributed evenly based on expertise and time spent in the various roles.

One of the suggestions I commonly read in these books is the idea of buying – Renovate – Hold for the long term.
-Buying a property in a good location with high rental demand
-Doing superficial work on the property to attract higher rents from tenants
-Leasing the property out for a increased rental return
-Revaluing the property – The renovation if done correctly may add equity in the property. You could potentially access this equity to start the process again.

Buying to renovate and holding will dampen any of the costs of buying and selling properties, plus give you a passive income from your own property portfolio.

Goodluck!

[Shane WParticipant@shanewebbJoin Date: 2016Post Count: 17]

May 14, 2016 - 10:07 am

I am just starting to go through the suburb due diligence in preparation of an investment property purchase.

My current thinking is to cross analyse the suburb information from those companies and other sources looking for consistency. I will then do my own research, looking at the various statistical websites available and speaking to people within the suburb to confirm the information I’ve obtained.

In the end it is your business and your money, although it is important to leverage of other people’s time and money, it is ultimately up to you to make informed decisions about what you want to do. I personally try to get the best understanding about each element of my investing and then using the appropriate resources and professionals to help me along my way.

Just my 2 cents worth.

[Shane WParticipant@shanewebbJoin Date: 2016Post Count: 17]

May 10, 2016 - 9:45 pm

I used to believe rich was those who drove nice cars, lived in nice houses and ate at only the finest restaurants. I now know better, most of those people with these luxurious lifestyles are not rich. Some live pay check to pay check just like those on a medium wage. Being rich has much more to do than appearances alone.

Obviously there is more to it than just money, you can have a very rich life without much money, but my definition here will focus on money.

Being rich to me means you have accumulated enough wealth that you can live on your assets, without having to work, but still maintain a lifestyle of abundance. This may differ on someone’s definition of abundance – Donald Trump would never be satisfied with only a few million dollars in networth, however, others are perfectly happy to.

Going back to a few post above, someone living in Nepal would consider most Australian’s to be rich. This question has to take account of the subject answering it.

For me it stems down to a person’s definition of an abundant lifestyle and what price that comes to.

Which of coarse means, in the original post, someone who has near zero assets and is close to retirement, is likely to consider someone with assets of 750k outside their home to be very very rich.

• This reply was modified 7 years, 11 months ago by  Shane W.

[Shane WParticipant@shanewebbJoin Date: 2016Post Count: 17]

May 9, 2016 - 4:05 pm

Sounds like you had a tough time Laert.

I am only a beginning property investor, but I have done a lot of research and read many books on the subject. I was initially going to go through a buyers agent like yourself. The books I have read all talk about the need for a mentor and the right team in place to ensure your property success. The more I researched books and read online, I came to realise that it is true that a correctly structured team can significantly push you towards your investment goals. However, I am sceptical with buyers agents. A lot of the buyers agents I’ve researched have had many bad reviews online, and may also get commission on selling the property to you – That is definitely not non-bias advice. I don’t know what your situation was, but perhaps the agent pushed this property onto you for the commission rather than being in your best interests.

Of coarse some buyers agents do not get commission from selling certain properties like a real estate agent – They only get the money you pay them to buy you a property. However I have read many reviews where certain properties were pushed onto the buyer as the agent wanted the buyers fee quickly.

I am structuring my team around tax accountants, brokers and a group of property investor networks – Where I know I am getting solid advice for my specific situation and will be biased.

Of coarse that is just my 2 cents.

Good luck with the rest of your journey.

[Shane WParticipant@shanewebbJoin Date: 2016Post Count: 17]

May 8, 2016 - 10:06 am

I would also like to state the following arguments against the possibility of a similar crisis here in Australia:

No doc loans are no longer available? From my knowledge, since the GFC, no doc loans are no longer offered by the banks. Is this true? Have we learnt from the subprime crisis in the USA?

Subprime lending reached a peak of around 20% in the USA, however in Australia, non conforming loans (subprime) represent only around 1% The lower prevalence of these non conforming loans in the Australian market protect us against a similar crisis.

Our banks have a more conservative lending practice than the US during the subprime crisis Our lending practices didn’t ease as much as in the USA due to restrictions from the RBA.

[Shane WParticipant@shanewebbJoin Date: 2016Post Count: 17]

May 8, 2016 - 8:20 am

Thank you Terry, you have been very helpful.

How does a discretionary trust work with borrowing money and tax deductions? If I have a trust set up and buy a property using borrowed money and is negatively geared – Am I still able to claim all the depreciations and negatively gear against my income?

[Shane WParticipant@shanewebbJoin Date: 2016Post Count: 17]

May 7, 2016 - 11:54 am

Great post. This is one of the questions I am currently trying to answer in structuring my portfolio.

I recently heard Ken Raiss from Chan and Naylor Accounting talk at a seminar. He talked about the different type of asset protection structures such as companies and trusts.

He highlighted each structure was specific to the investor, however the most common trust structure was a “Property Investment Trust”. These trusts had been created specifically for property investors with some of the following benefits:

No vesting date Most trusts had a vesting date in which the trust would cease and the entire contents to be paid out to the beneficiaries. However, the property trust had no vesting timeline – Which is useful to avoid capital gains tax and passing assets to future generations.

Tax incentives Ability to pay the profits of the trusts to multiple beneficiaries – Those with lower incomes/lower tax brackets. Apparently as the trustee – You can choose how much is paid to each beneficiary. It was also stressed that the creation of a trust solely for tax incentives was considered tax avoidance and a criminal offense. However there are other valid reasons to create a trust such as asset protection.

Protection of a trust As stated above, protection of the assets within the trust from litigators.

Dynamic beneficiaries Able to appoint new beneficiaries – Such as children ect.

Ability to pass on the trust to wife or children if you passed on The trust would continue on, acting similar to a will and avoiding capital gains tax when passing on assets.

A few questions from me:

All of the books i have read have indicated the affluent hold most of their assets in trusts. In the next 10-20 years i aim to have a muilti million dollar portfolio and may wish to asset protection such as a trust. Is it a costly and complicated process once I am in this situation? Is it worth starting a trust now before beginning my property journey?

What type of trust is recommended? A trust similar to what i have described?

How much does a trust structure cost to set up? Does it cost extra during tax time if your assets are owned in a trust?

Can anyone validate the information I wrote above regarding a property trust?

Finally – Is there any good websites or books to research the subject further?

Many thanks

Shane

[Shane WParticipant@shanewebbJoin Date: 2016Post Count: 17]

May 7, 2016 - 11:09 am

I really enjoyed this post. As someone who is just beginning the property investment journey – setting a goal has given me confidence that my actions are going to the right direction.

I have recently read Rich Habits by Tom Corley. In his book he identifies one of the major habits of the affluent is to set long term, medium and short term goals. Every week, time is set aside for action towards achieving these goals.

Another quote you might like Benny “The issue isn’t that people set goals too high and don’t achieve them, it is that people set them too low and achieve them” -Michael Yardney. This resonated with me quite strongly. I know my lovely parents aimed too low in terms of wealth and got it. Whilst they are happy, if they aimed higher, they would not still be working wondering how they will eventually retire.

My goal is to have a $100,000pa income from a real estate portfolio in 9 years time. I will do this by investing in a property portfolio focusing on high capital growth.

I have broken this down to yearly, monthly and weekly goals. I have tried to be as specific as possible. I have included everything from appointments with financial brokers to books I will read to inform my actions. As Corey stated, breaking down these goals into smaller steps.

Thank you for this post – It is the best post on goal setting I have read.

Shane

[Shane WParticipant@shanewebbJoin Date: 2016Post Count: 17]

May 5, 2016 - 9:28 pm

Thanks Benny,

I had a quick glance through the forums. The thread is like an index for everything you would want to know about investing. I will have a proper read through over the weekend.

Thanks for the information.