The power of compounding.

Imagine if you could save an extra 0.1% off the loan and structure things so you can get an extra $5k pa in tax deductions and use the offset account.

I see so many people who are costing themselves a fortune because of poor structuring.

Trusts can improve borrowing capacity in another way.

e.g You own a house in your name. High growth and then you suffer a default – something innocent. You apply to a bank but they won’t allow you to access the equity. You wait 5 years to get back on track.

or

You are director of a trustee company which owns the property. as above you suffer a…[Read more]

sydneyinn wrote:
Thanks Terryw, I suppose it sounded too good to be true… is there any truth in what Steve has written about using Trusts to purchase properties?

Is there any possible way to do what Steve is alluding to?

Thanks.

Yes. Have different people behind each trust. You may be behind one and then your spouse behind another. Needs…[Read more]

Kade wrote:
Its with her sister, we are getting her name on both so that we can use the equity.  

That is good, but it will incur stamp duty, legals and a new loan. Also the sister will need to go on any loan to access the equity

Ha ha – how can you rent to yourself?

If you are separating as in a relationship breakdown then there are stamp duty exemptions so you may be able to acquire this property if full. If you sell and buy another then you would be up for stamp duty again. Factor this in.

sydneyinn wrote:
Hi there, I just finished reading "0 to 130" and Steve says:

"The way to get around your borrowing limit is once the ABC Bank has said 'no more', create a new trust structure and approach a different bank…"

i) Does this work?
ii) Is this easy to do?
iii) How much does it cost to start a trust?

I currently have one…[Read more]

Kade wrote:
Yeah currently paying down some debt.  My partner has a property which has 70k equity in it, but her name is not on the loan atm.  We will be rectifying that soon so that we can use half the equity to get ourselves an investment property.  I want to use a buyers advocate as i live in a mining town and its expensive to fly to check…[Read more]

If you have non deductible debt you should pay this off first, so you set up a LOC on any property and borrow to pay investment expenses. It is pretty simple and straight forward

Sounds like the standard strategy – see Jan somers books from 20 years ago.

Yes it could be done. This is what is called a 'wrap'. Title would remain in your name until they are able to get conventional finance and pay your out.

Read your loan agreement though as you may need to get the lender's permission.

I can think of 2 lenders that would do a discharged bankrupt after 2 years – should be possible i think.

jussin wrote:
Hello all! i am seeking some advice or knowledge please. Currently i own a 50% share of a property with my mother who owns the other 50%. I am looking to take 100% of the title and another investor i spoke to a while ago mentioned that the government will sometimes waive if not minimise the amount of stamp duty payable on this sort…[Read more]

Pay cash for the house and then borrow against it to buy the IP.

Also consider asset protection strategy or 2.

wilko1 wrote:
Just reading it my first thought is

why do you have a mortgage on the property that you are living in ? and why do you have no mortgage on the investment property ?

I think you should swap your loans around because as catalyst was talking about there is non deductible debt. and dedeuctible debt 

That means that the interest you…[Read more]

Consider also estate planning and ownership structures – sole, joint tenants, tenants in common, trusts, companies SMSF etc. Consider what ifs:
death, incapacity, bankruptcy etc

Freckle wrote:

cbarry wrote:
my broker told me to stop over analysing everything and just simply buy something.

Get another broker. That one isn't worth 2 bob.

A good broker does more than just get you the finance. They help you understand and analyse the deal. They should also help you refine your investing strategy that enables you to be…[Read more]

cbarry wrote:
Hi Freckle,

I was under the impression a mortgage broker only looks after getting finance for you. My broker said she isn't there to offer me financial advice! I thought they were separate?

Yes, they are separate. However some brokers are also licensed financial planners, and/or solicitors, and tax advisors as well.

1. yes
2. yes
3. no, income tax

Options would be better, but also CGT or income tax on the assignment and stamp duty on the value of the option – recent changes or soon changes in NSW so you may have to pay stamp duty on value of the property.

a. not really
b. not in nsw

What do you need advice on? Consider structuring and tax and a few asset protection strategies as well.

There is no one right strategy. You need to think which will make you the most money – factoring in potential capital gains