Greg

I haven’t looked into these trusts before, can you really get a 12% return?

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

Pelican

I agree that homework is the key, it may also be an idea for the wrappee to get copies of the wrappers loan statements to make sure they are paying off their loan too.

But I think someone with a first mortgage would be able to take back the property regardless of any caveat. But I am not a solicitor and have never seen or heard of a…[Read more]

As a broker, i see a lot of people who get the shits with their bank and then want to change to another, then a week or so later I see someone else who is with the new bank that the client went to, but they have the shits with this bank and want to change to the one the other guy just left!!! Brokers love these people with the shits as it can mean…[Read more]

Yes your lawyer should know about this and would be the best perosn to talk to.

The finance company is unlikely to issue a full approval until your gf has been working full time for 3 months tho.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

Pelican

I don’t mean to be picky, but a caveat would not help in the event of foreclosure. It would protect the wrappee by not allowing the property to be subsequently mortgaged, but a bank holding a first mortgage would get first shot at selling the property. the wrappee would get the left overs, if any.

Terryw
Discover Home Loans
North…[Read more]

ANZ are giving good service atm. But don’t be too hasty. It seems every bank goes through stages – they are all s#*@y for approx 2 months per year as they go through s#*@ cycles.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

I think is it just like renting, but without a lease. It ofen happens when a purchase is involved as long leases want to be avoided. I think possibly, the agent wants her to sign the contract of sale with a long settlement, with her living in the house paying ‘rent’ until the settlement actually happens. If doing this, she should be careful that…[Read more]

Just remember that it is land that appreciates and buildings that depreciate. So in theory, a house would be better as it has more land content than a flat. But a flat may give you more depriciation making it better short term.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

I agree that it is a good strategy, but one minor point with your example.

If you PPOR is valued at $200,000, then 80% is $160,000 less your current loan of $100,000 = $60,000 in equity available. I am not sure you understood the equity available is 80% less the current loan on that property, as your example had a $63,000 deposit which was more…[Read more]

The wrappee could possibly lose everything if the bank forecloses on the wrapper.

The wrap payments could be used as evidence of a savings record with some banks.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

The trouble with wrapping it is that you will not get the money to do your renos. You may be able to squeeze a small deposit out of the tenant and get extra monthly repayments which will help you, but you won’t get a large lump sum as you would if you sold it.

The credit problems may not be an issue as these only stay on their record for 5…[Read more]

To make the COC return meaningful, I would assume you are paying a 20% deposit.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

I have not looked into these property trusts, but was intrigued when I read PS’s book. Do these really exist? And can you get margin loans at 70%?

You example looks good, but it looks like you already have a lot of equity to be able to do it.

You probably would not be able to borrow 80% of end value of your project. Maybe you could get 60% at an…[Read more]

That’s a good point Simon makes. Being in a partnership hurts your serviceability. This is because each person is responsible for the whole debt – not half as you would expect.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

There are also tax implications. Any money paid into a LOC or homw loan with redraw is considered by the ATO to be a repayment. When you take the money out again it is considered borrowins and the purpose you took the money out for determines whether the interest on this part is deductible or not.

Terryw
Discover Home Loans
North…[Read more]

Hi Greg

You might want to look at http://www.chrisbatten.com.au as there is some information there on best structures for doing developments etc. You may have to may for the good info, but I am sure it will be worth it.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

Yes I beleive they wouldn’t have to pay stamp duty on the option, but it may vary from state to state. beside the option fee, the only other cost would be probably legal fees to have a solititor check out the agreements and maybe lodge a caveat.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

I wonder what happened to the stamp duty exemptions that the ‘offender’ would have also claimed.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

You can charge for whatever you can get away with, but if it goes to the tribunal then you may be ordered to pay it back.

It may be better to build it into the rent.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au

I think it is best to go on your own, but if you can’t or don’t want to, the The Investment Club is one of the better places to go thru.

Terryw
Discover Home Loans
North Sydney
terry@discoverhomeloans.com.au