Hi Richmond

Basically what Michael says is (theoretically) correct, but he hasn’t taken into consideration closing costs. Assuming 5%, then the figure would come down to $1,320,000.

But you still must meet serviceability requirements, ie you must have the income to support the loan repayments.

Putting your figures into one of the bank…[Read more]

Michael

I have no experience (as a mortgage broker) with getting loans for clients with Hybrid Trusts soI don’t really know how banks will treat them. I have had client purchase property thru a discretionary trust and the bank always asks for a copy of the trust deed which they (supposedly) have their legal people scrutinise to make sure the…[Read more]

Michael

2 points:

1) I have heard it is harder to get banks to accept hybrid trusts.
2) I have also heard Dale GG mention that Hybrids may not be as safe from a asset protection point of view.

Terryw
terryw@froggy.com.au

Stuart

I can guess who you are talking about and agree with you on that one!

Terryw
terryw@froggy.com.au

I don’t think you would need a tenant in place as long as you had the property up for rent. ie you were trying to find a tenant.

Terryw
terryw@froggy.com.au

One more thing on hybrids. I have heard that banks do not like lending to Hybrid trusts, so it may be harder to get finance. Although I am a mortgage broker, I have no experience in this area. Could any other brokers out there please comment? Or anyone with a Hybrid Trust?

Terryw
terryw@froggy.com.au

Michael

I have the book in front of me now.

He has lots of nice diagrams explaning actual case studies. It is actually not that difficult a book, expained clearly. However most of it is the same old stuff.

A few good bits include:
-The negative gearing time bomb (how buying an ip in the highest income earners name backfires if it is sold and…[Read more]

David

It is calculated as 80% of value less current loans.

eg in your example, total value is $330,000. 80% of this is $264,000. However, your current loans are $195,000, so you should be able to borrow another $69,000 ($264,000 – $195,000).

BTW, You will also still have to demonstrate serviceability to qualify.

Terryw
terryw@froggy.com.au

You could sell your half to your spouse (if it was purchase in two names). Get a loan to do this and the proceeds would be put off your new home loan.

Or you could do as Michael and Kaye are doing and sell your house to your Trust. (see their post today).

Or
Steve Navra’s technique. It goes something like this:
You get a annuity with the purpose…[Read more]

Michael

I have purchased this booklet. It is fairly technical and sometimes difficult to understand. It has been a while since I read it, so will dig it out tonight and skim thru it again.

From memory half of the book was just print outs of various tax rulings (which are avaliable on the internet if you know where to look).

Terryw
terryw@froggy.com.au

Steve

I think the point to the hybrid is to make the losses distributable. I am no accountant, but I think that discretionary trusts cannot distribute losses, but unit trusts can. A Hybrid is a combination of these two trust types.

There are apparently Hybrid Unit trusts and Hybrid Discretionary trusts. Both are slightly different, but I don’t…[Read more]

Nick

This is just like a lease option, but they tenant only gets a portion of the equity.

From the example, it doesn’t appear to be too good for the tenant, so I don’t know if anyone would be willing to pay an extra $300 per week for this one.

There was one person offering something like this on new units in Parramatta a while ago. I think the…[Read more]

You don’t say what CBD?

I purchased a property off the plan and have just recinded the contract because it hadn’t gone up as expected (Melbourne).

I think now is probably not the time to be buying off the plan in Sydney or Melbourne.

Terryw
terryw@froggy.com.au

I friend on mine bought a 3 br house in Macquarie Fields (in Sydney) last year for 148,000. She just sold it for about $250,000. There are still cheap places in Sydney.

Terryw
terryw@froggy.com.au

Just think of how much money you could make if you used this money yourself. Eg if you used it as deposit on a property, a wrap maybe?

With this 2nd mortgage you would only make $4125 in 6 months. Do you have to pay any legals?

If you used the $50,000 as deposits on
– 2 wraps with a purchase price of around $100,000 how much would you make?
– 2…[Read more]

Go to http://www.chrisbatten.com.au

I hear that the hybrid trusts are not as good for assets protection as a discretionary trust and the unit holder could be sued and loose their unit.

Terryw
terryw@froggy.com.au

DS

That name rang a bell. He has an advert in the latest Wealthcreator magazine (this is put out by Henry Kaye associated companies). His ad talks about creative finance strategies etc. Sounds interesting.

I beleive it would be worthwhile going to any free seminar (if you have the time). And please report back to the group.

Terryw
terryw@froggy.com.au

My trust has me as trustee and the deed is worded so that any company that I am a shareholder of or office holder of is also automatically a beneficiary of the trust.

I think you can see some sample deeds at:
http://www.chrisbatten.com.au

Terryw
terryw@froggy.com.au

Hi New Investor

Kangaroo Valley is one example and the Piction area as well (20% growth over last year or so)-And only 1 hr from city on the M5

Terryw
terryw@froggy.com.au

Hi Nick
Here is a rough guide on LMI rates:
LVR Up to $300,000 $300,001 to $500,000 Greater than $500,000
0 to 80 0.35 0.45 0.69
80.01 to 81 0.46 0.58 0.9
81.01 to 82 0.48 0.6 0.93
82.01 to 83 0.61 0.78 1.22
83.01 to 84 0.66 0.84 1.32
84.01 to 85 0.78 1 1.56
85.01 to 86 0.85 1.09 1.7
86.01 to 87 0.93 1.19 1.86
87.01 to 88 1 1.27 1.97
88.01 to…[Read more]