Arthur, it costs as little as $135 to establish a trust (and maybe stamp duty depending on your state). see http://www.cleardocs.com.au

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

Wrappees generally try to cashout as soon as they can, -getting finance with standard lenders at much cheaper rates.

Also it is generally cheaper to rent than purchase for everyone – not just wrappers. So most people are looking at getting into the market and getting a hold on some of that capital growth.

Terryw
Discover Home Loans
North…[Read more]

I am not sure either.

The property had probably grown in value and the developer resold it at a higher profit, making more money.

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

Major regional centres may still be OK, but watch out for the smaller towns.

I think you should not be buying based on yield alone, make sure everything else stacks up.

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

I think if you do something that makes the item ‘better’ than it was originally, or changes its original character, than it would be deemed an imporvement. replacing damaged carpet would be a repair if a similar carpet used, but if you use a nicer more expensive carpet, than it may be an improvement.

Terryw
Discover Home Loans
North…[Read more]

As far as I know, no banks will lend for wraps, so you might as well go to a specialist lender such as the above.

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

I agree with Simon – there is possibly no need for a second mortgage.

These are only used by people who cannot get a high enough first mortgage. Generally the market rates for second mortgages are around 20% pa and the LVRs are around 80% max.

It is usually only desparate people that get second mortgages this way.

Maybe you were thinking around…[Read more]

Another point.
If your loan on your PPOR is currently small, then you might be paying tax on your rental income as this will probably be cashflow +ve.

But your new PPOR is likely to have a large loan and hence, you will be paying large amounts of interest which is not claimable.

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

I picked up Peter’s new book yesterday, and from what I have read so far, it is very good.

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

I wonder how much the property would be worth now? The wrappers may have made more money in the long run from capital growth even after giving $31,000 back to the client. They only paid $25,000 for it apparently.

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

Not sure, but he has a nice girlfriend and a nice hairdo as well.

I heard he was making a fortune from the new tv shows, “the appentrice”.

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

The trouble with trusts is the income is discretionary. One year you may get some, the next could be different.

I guess it is the same with employment though, you could get fired anytime.

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

If you are getting the vendor to leave money in like that you could be getting 100% finance, so you can’t expect too much discount.

If you are going to wrap, then it shouldn’t really effect how much you charge. It should be basically market rates (for wraps). The wrappee should expect you are making a margin on the price and interest rate to…[Read more]

Some tough questions there!

1) It is very easy to change trustee’s if your trust deed allows it. but this could have major implications such as
a) changes to the loans (loans are in trustee’s name)
b) could result in stamp duty payable again in certain circumstances (see http://www.cleardocs.com and your state revence office website)
c) if the ATO…[Read more]

Hi Gavin

I have found out a few things. It seems it may be more difficult than you (and I) imagined.

You would have to be in a good financial position, with income coming in from outside the farm, and hopefully experience in the industry – ie how would you run the business.

Would need to know the exact location, but probably the max LVR would…[Read more]

That is a fair amount of equity. If you could get a LOC, you could possibly buy a property for cash, do a quick reno and then mortgage that property at the value (rather than purchase price), releasing 100% (or more) of the money you put in originally, and then do the same thing again.

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

Surely ATO assesement notices would do the trick. You cannot get group certificates as it is not employemnt. You are kind of self employed and should only have to show your tax returns and maybe the trust tax returns. You must have tax returns unless you are earning less than $6000 pa in taxable income??

Terryw
Discover Home Loans
North…[Read more]

There may be a few ways to increase debt in a way to keep the ATO happy.

eg. You could sell you share to your spouse. They would have to borrow money to buy your share (increasing the deductible debt). They money your spouse pays you would be tax free (as from main residence) and this could go towards your new house. You may even qualify for…[Read more]

You easily could qualify for a No Doc LOC up to 65% of the value of the property without too many hurdles. No Docs = no income needs to be declared, ie virtually an asset lend.

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

Having no job is not a barrier to getting a loan.

You could get a ‘no doc’ loan on your Newcastle property to 65% of the LVR = $156,000 approx.

Use this as deposit on a new property in Sydney based on a 65% LVR loan. You could buy something around the $380,000 mark.

But you must be sure you can service these loans. Renting the newcastle one…[Read more]