There are only two LMI companies which makes it hard. Both have certain requirements for maximum exposure levels per client, meaning they will only approve lends up to a certain total amount per borrower. This does not matter which bank you go with, all adds to the total. Offhand, I don’t know what the limits are for full docs, but for low docs…[Read more]

I am getting increasingly concerned about people buying inferior properties just because they are producing positive cashflow. I would only go for properties with good potential for capital growth.

Terryw
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terry@discoverhomeloans.com.au

Hi Tom

I’m not really sure what you mean, but you cannot use a wrapped property as additional security. ie you cannot cross securitise a wrapped property. So you will need a 20% cash deposit for the next one. (Or you could use another unwrapped property as additional security).

Terryw
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terry@discoverhomeloans.com.au

You will probably need a different structure in each country you invest in. I am interested in investing in Asia too, where are you looking at?

Terryw
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terry@discoverhomeloans.com.au

ajgebhard

I wouldn’t say asset protection is only of concern to business owners.

Other advantages of trusts include:
– taxation, trusts can save tax and claim things that an individual can’t
– Estate Planning. Passing assets on via a trust can be easier and cheaper with possible CGT and stamp duty savings.

Terryw
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Mortgage…[Read more]

Bigben

Watch out when ringing the ATO. If you ring back and ask the same question 3 times, you may get 3 different answers!

Terryw
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terry@discoverhomeloans.com.au

I agree with Pete, it is not income and I can’t see any lender regarding it as income. Even if you were receiving interest, it is still unlikely that they will take it into account for serviceability. This is bacause, you could simply take it out of your account at anytime.

Terryw
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terry@discoverhomeloans.com.au

Print out a few of the posts made by Julia on this forum. That should help.

Terryw
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terry@discoverhomeloans.com.au

These are trusts established offshore, usually with the intention of hiding assets or income, often in tax havens. Do a search on google for ‘tax haven’ and you will find a lot of stuff.

Terryw
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terry@discoverhomeloans.com.au

unless they are on title, it will be difficult – third party guarrantees.

Terryw
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terry@discoverhomeloans.com.au

What happens when you lend him the money and he just drives off into the sunset?

It is very hard to get bank finance for these homes as they can be easily moved. So you wll have the same risk, you will also find it very hard to finance and will have to pay for most of it in cash, making it a low return. And what if he defaults? you will have to…[Read more]

Pete, your spot on. I’ve ‘refinanced’ two wrap clients with the same bank (as a broker, not a wraper). The first time, they didn’t know what to make of it, and took it a s a refiance, teh second time, they would not consider it a refinance but as a purchase and would therefore only lend on the contract price of 18 months ago and not on current…[Read more]

Don’t do it!

I sold a good home about 3 years ago to ‘wrap’. If i had held onto the bloddy thing I would be rich now. Wraps only produce a low income for the rist and work involed and you don’t get much of the capital gains. Growth makes you rich, cashflow doesn’t. Cashflow helps you to survive, but not get rich.

Terryw
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I don’t invest in NZ, and don’t know much about tax there, but Wouldn’t you have to declare the income in Australia anyway if it was in your own name? A Trust may give more flexibility in distributing it to the lowest tax paying beneficiary, or even to a company in NZ and leaving it there. And what are the costs to transfer it to a trust – you may…[Read more]

Try describing wraps as ‘installment contracts’ and see how you go.

http://www.mintgroup.com.au Bruce whiting is an Sydney accountant that understands wraps

http://www.businesslawyer.com.au Anthony Cordato is a Sydney Lawyer that understands them too.

Terryw
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Mortgage Broker
terry@discoverhomeloans.com.au

resiwealth – I’ve learn’t my lesson.

Only a fool learns from their own mistakes, a wise person learns from the mistakes of others.

Terryw
Discover Home Loans
Mortgage Broker
terry@discoverhomeloans.com.au

resiwealth

Sometimes wraps can be much cheaper than banks, and they are much easier to qualify for. eg. for a 90% loan with GE the rate would be around 10.65% for someone with a minor credit problem, (major problems wouldn’t even be looked at) and they still have to come up with a 10% deposit. Most wraps would be 8-9% with often a smaller…[Read more]

Similar to residential. It varies alot, with higher interest rates and lower LVRs – No LMI available, max LVR around 70%, can go to 80% at higher rates. valuations are harder to do, cost more and can vary a lot. very hard to get commerical finance in non city areas.

Terryw
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Mortgage Broker
terry@discoverhomeloans.com.au

I too wouldn’t sell such a good asset. Use the equity if you wish to invest.

Terryw
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Mortgage Broker
terry@discoverhomeloans.com.au

I also have wrapped to someone on a disability pension. It is also a long term thing with a quick refinance very unlikely. My ‘tenant’ has been behind in the rent, and it would be very hard for me to kick her out as I sympathise with her. I could get tough and legally do it, but…

That is why I would never do it again.

Terryw
Discover Home…[Read more]