[stargazerParticipant@stargazerJoin Date: 2002Post Count: 344]

September 17, 2023 - 2:00 pm

Hi Benny

Thank you for taking interest in this.  To answer your Questions (In Bold)

1.  Dates of purchase (roughly) of these properties, and dates of changes from PPOR to IP, etc.  These dates may be significant…..

•      Inv Prop 1.  Purchased 2002 Was PPOR / 2010 became INV PROP (Val at time 350,000)
•      Inv Prop 2 Purchased 2000 bought as Inv property.
•      PPOR Bought in 2016

2.  “About half” in your Offset – was that half of val, or half of the mortgage owing?

• Half Mortgage Owing

3.  From the few figures I see, these look to be positive geared today – is that right?  i.e. they don’t cost you to own any of them?

• Yes although with the interest rates moving as they have this has reduced and increases in expenses.

The Investment Props at this stage don’t cost me but don’t provide enough income if i was relying on them for income.  The PPOR obviously I service the mortgage.

 

Looking at the retirement aspect of this say in a few years time, i cant see these providing the necessary income with the current debt/rent ratios with the status remaining the same.  

Regards

SG

 

 

[stargazerParticipant@stargazerJoin Date: 2002Post Count: 344]

September 15, 2023 - 11:46 am

Hi Steve

Thank you for your taking the time to reply.  Yes 2002 wow how time goes by.

I did start with a clearer vision to what i have now.  I did start the journey etc.  Then as life does it takes its turns

with Marriage Break up / GFC / Some health issues at the time / Employment issues / Entrusting Financial Adviser (that was a major set back), i probably am lucky to be where i am asset wise, even though still carrying considerable debt.  Despite the set backs i was able to hold on to what i have described in my post.

Looking forward i am probably looking for honest guidance.  Some people can see things i cant but once explained it then seems obvious, (Of course what couldn’t i see that).

At my age and debt, borrowing capacity has dwindled with my current status.

The only option at this stage that i can see is that i have to sell to reduce debt and start moving towards being debt free in retirement.  However i am open to ideas.

Unfortunately unable to attend the Adelaide 14th October due to another commitment.  However there may be another opportunity.

Thank you again for responding

It just seems difficult to find someone to sit with, and start to work out best way forward.

Regards

SG

PS i did buy the money magnet. Great Read.

[stargazerParticipant@stargazerJoin Date: 2002Post Count: 344]

June 21, 2010 - 2:00 pm

Hi all

Something to think about, a few years ago i wanted to get into the stockmarket.  I saw and heard speakers,  etc .  I, at the time agreed, why would you spend $5k for a program, workshop etc  all the info is in books and internet etc.

I  subscribed to the latter thought.

Now still breathing oxygen after going through the GFC and losing everything i am going to now do a workshop on property and put $5k on the credit card. I cannot afford to pay that but sometimes you just have to change what has not worked.

SG

[stargazerParticipant@stargazerJoin Date: 2002Post Count: 344]

June 21, 2010 - 2:15 am

Hi Jess

Just came across this thread, just wanted to ask you, having done the program now and the materials you have  are you now confident enough to go out and source your first project.

I am considering doing the program myself not sure i can justify the 5k.

Cheers
SG

[stargazerParticipant@stargazerJoin Date: 2002Post Count: 344]

February 11, 2009 - 1:29 am

Hi all

Than you all for your comments and suggestions. 

SG

[stargazerParticipant@stargazerJoin Date: 2002Post Count: 344]

October 5, 2008 - 7:30 am

Hi

Why don't you contact one of the forum mortgage brokers and discuss it. As  indicated they can make it happen based on what you have shown.

Cheers
SG

[stargazerParticipant@stargazerJoin Date: 2002Post Count: 344]

September 10, 2008 - 4:33 pm

Hi thanks for the comments,

Their attitude was as long as the funds were drawn down and intended for investment and could clearly be seen to be used for investment they could be parked with non investment funds short term and certainly would not be contaminated.

Don't know if i would be comfortable with this unless it was crystal clear. 

If you did this and the ATO did an audit they would ask why you placed these funds in this account etc. 

So you say just parked the funds from my INV LOC into OFFSET account  wating for an investment to come along.  I also am claiming the interest on the LOC that i have drawn down.   Meanwhile this has offset my personal use interest  I am not sure they would accept this explanation.

Also what is SHORT TERM. 

Cheers
SG

[stargazerParticipant@stargazerJoin Date: 2002Post Count: 344]

September 9, 2008 - 2:16 pm

Hi Terry

I have heard of that case myself but the name escapes me.  This is my thoughts also in regards to drawing down LOC investment funds to park in savings account offsetting a Loan for personal use.

This is how i read QLDs007 reply in the draw down that was explained into P&I loan.

Cheers
SG

[stargazerParticipant@stargazerJoin Date: 2002Post Count: 344]

September 6, 2008 - 6:16 am

QLDS007

I would probably prefer to see the LOC funds drawn down into the offset account and the monthly interest come out from there.

OK i am still not sure here i understand what you are saying but i getting lost with the above as you outlined previously.  This is how i am reading you:

SAVINGS OFFSET ACCOUNT LINKED TO PERSONAL P& I …..is the main engine so to speak.WAGES RENT ALL BILLS PERSONAL AND INVESTMENT ARE PAID FROM HERE.

THE PPOR NOW IP  LOAN and INVESTMENT LOANS ARE PAID FROM OFFSET.

THE P& I PAYMENTS ALSO COME FROM OFFSET IF ANY

THE LOC IS WHERE I AM STUCK IN THE ATO CONSDERATIONS..

.IF I DRAW DOWN AS YOU SUGGEST THE INVESTMENT LOC AND PARK THE FUNDS IN THE OFFSET ACCOUNT THEN THE INTEREST ON THE LOC WOULD POSSIBLY NOT BE DEDUCTIBLE AS I HAVE USED THE FUNDS TO OFFSET PERSONAL DEBT THAT IS THE P& i LOAN.

THE INTEREST THAT I AM CONCERNED ABOUT IS NOT THE ONE THAT IS BEING PAID TO ME AS THERE IS NONE IT IS THE INTEREST THAT IS INCURRED IN THE LOC DRAWING DOWN TO OFFSET PERSONAL DEBT.

HOPE THAT MAKES SENSE.

CHEERS
SG

[stargazerParticipant@stargazerJoin Date: 2002Post Count: 344]

September 6, 2008 - 5:16 am

Hi

I would probably prefer to see the LOC funds drawn down into the offset account and the monthly interest come out from there.
Just some finer point re ATO. 
If my wages and all my personal bills are paid from this OFFSET account and also my rents and my investment properties bills are paid from the same account  Isnt this then mixed if i draw down the INVESTMENT  LOC amount into the OFFSET account.  The draw down would not be for investment purposes….

For the purpose of discussion if i kept my PPOR as is and stayed would i then would this set up require 2 offset accounts one for PPOR and one for INVESTMENT PROPERTY.

Am i missing something here?

Cheers
SG

[stargazerParticipant@stargazerJoin Date: 2002Post Count: 344]

September 5, 2008 - 4:07 pm

OK Qlds007

Have a question.

Lets say the structure you indicate is set up.  The rents wages etc are all going into the OFFSET account which is linked to the P&I loan.

Lets assume just for the exercise that for a period of say 2 months  both properties are vacant due to whatever eg high vacancy rate say.
Now i only have a wage going into the OFFSET account but no rents which will be a problem not enough to pay the interest on both properties.
With a LOC you would have this BUFFER to cover you.

So if the structure was set up as you indicate and the scenario that i have indicated does unfold can i use another LOC account that is for investments to make the payments to the IPs whilst waiting for the properties to be rented.

Hope that explains it ok.

Cheers
SG

[stargazerParticipant@stargazerJoin Date: 2002Post Count: 344]

September 5, 2008 - 10:16 am

Hi Crashy

Where i am blocks can be right down to around 300sqm even a bit less in some cases frontage aound 10m.   A block this size around 8km from CBD is around $600psqm round figures.  Closer is more of course.

 I had a 100sqm block recently valued at $200,000 in heart of CBD. 

Cheers
SG

[stargazerParticipant@stargazerJoin Date: 2002Post Count: 344]

September 5, 2008 - 10:07 am

If you are suggesting turning the LOC (A) to a P&I loan linked to the offset could you explain your thinking here as i cannot see why i would do this. Don't think i would get a P& I loan for $25,000 – Yes i would suggest this. 
Ok  i understand but would the bank do this for the small amount? 

If you are tired of responding to this no problem i understand thank you very much i have learnt something i didn't know i could do re: P&I.

All the best
SG

[stargazerParticipant@stargazerJoin Date: 2002Post Count: 344]

September 4, 2008 - 1:56 pm

Hi all

I seem to have 2 threads of the same title not sure how this happened….lol

Thankyou for the replies much appreciated.  This is my thinking and i can be corrected as i am only tossing around ideas.

Buy property with say 800sqm block
Resident already on it
Providing all is well and the numbers look good.

split the land and sell one block.
eg property cost $400,000
rental $400 a week
80% loan so $80000 your money
sell block approx $250000
pay $80000 back to myself so my money is out of the deal.
reduce the $320000  @ say 8% loan to where it is neutral cashflow so it cost me nothing to hold ,and keep the rest of the money for other things

$250000-$80000-$100,000 leaves approx $50000 to myself this is after all costs etc

Loan now 220,000 not cost to hold.

Thats my thinking.

Tear it apart no problem.

Cheers
SG

[stargazerParticipant@stargazerJoin Date: 2002Post Count: 344]

September 4, 2008 - 1:36 pm

Thanks for that yes there are quite a few issues for the unwary.  My estimate from my own sourcing is around $20, 000 for subdivision one block to two.

Trees can be an issue and easements etc

Thankyou for you replies

cheers
SG

[stargazerParticipant@stargazerJoin Date: 2002Post Count: 344]

September 4, 2008 - 1:32 pm

Hi
see how i go this time otherwise an email maybe a good idea..lol You have thrown me a little bit.

I was under the impression that the LOC for your personal purposes was not drawn at all.
No problem this is the LOC that has a LImit of $25,000 sorry not 20,000 as i mentioned before.
So the mortgage is for $85000  this is the home loan interest only variable with offset account
The LOC( A) is seperate account  and is split  this one for personal with a limit of $25,000 with $15000 drawn  So still have $10,000 if needed
The LOC ( is for investments so tax deductiblle

If this is not the case the convert this to a P & I loan and link the offset account to this loan and not your IO loan on the same property.
If you are suggesting turning the LOC (A) to a P&I loan linked to the offset could you explain your thinking here as i cannot see why i would do this. Don't think i would get a P& I loan for $25,000

To my understanding $85000 is the amount that i can claim interest on i cannot increase this?

Make sure that the loan for personal purposes is totally separate to the loan for your shares.
Yes i am aware of this

Have ALL of your income going into the offset account liked to the separate P & I loan which you used for personal purposes.
Yes understand this but refer to previous query re P&I loan.

See how we go this time..lol

cheers
SG

[stargazerParticipant@stargazerJoin Date: 2002Post Count: 344]

September 4, 2008 - 11:49 am

Hi Jaffasoft

Thanks for the wise words of encouragement.  Yes i am at the research stage.

Costs and the people one needs to involve is a start.

As you said architect etc.

When someone has done it, it can really help to know the pitfalls to avoid.

Thanks again
SG

[stargazerParticipant@stargazerJoin Date: 2002Post Count: 344]

September 4, 2008 - 9:56 am

Hi again

Thanks for your replies Qld007 appreciate this

Just to be sure here:
Current.
Mortgage Loan Interest on PPOR is paid by my wages
Have a savings account/Offset set up for PPOR mortgage loan.
The LOC for personal use is half drawn
My wages pay for my:
PPOR interest
Personal LOC interest
Inv LOC interest as i have bought shares with this and incurring interest but do no want it to capitalise.
My wages go into the Offset account .

The IP
Have the Mortgage Loan
The LOC not drawn at this stage

What my thoughts are and i could be wrong:
With a LOC if i buy another IP and there is a shortfall the LOC picks it up and so may capitalise slightly.
If i have a OFFSET a/c then if there is not enough in there i may get caught.

I am looking at this incorrectly?

Cheers
SG.

[stargazerParticipant@stargazerJoin Date: 2002Post Count: 344]

September 4, 2008 - 6:21 am

Drip feed the monthly interest repayments on the 2 IP loans from here.

When you say drip feed what do you mean pay the interest bit by bit or as a monthly total.

Cheers
SG

[stargazerParticipant@stargazerJoin Date: 2002Post Count: 344]

September 4, 2008 - 6:17 am

On the basis that the LOC non dedcutible debt is not drawn at all get your lender to link a 100% offset account to the IO loan and have all of the rents and your salary going into this account.

Hi again this is interesting i was under the impression that the rents had to go to the account that is used to pay the loans etc.

Currently this is from the Investment LOC this pays the loan and the rent goes into here.  Would the ATO question that the rent money is not going into the account that is paying the Loan interest.

The val on my PPOR was very recent.

Cheers
SG