Hi all,

Just to give you some background to my question – My partner and I currently have two properties and are hoping to purchase another one before too long. Our current properties are both slightly negatively geared, so we would like to now find one or more positive cashflow properties to complement them.

Our current properties are in both of our names, and are "cross securitised". (I'm now fully aware that this isn't the best situation, but we did it at the time as we didn't have the 20% deposit.)

* The properties are worth about $600,000.

* We owe about $480,000 on them.

The questions I have are around choosing the correct structure for our next purchase…

1. I recently read one of Steve's books, which indicated that there is a real benefit in borrowing with a trust and company setup, in order to borrow again and again without the limitations of being seen by lenders as "maxed out". Who has tried this? Does it really work?

2. Is structuring our next purchase with a trust and company as the trustee where I am the director likely to work for us in terms of providing greater borrowing capacity? Or have we effectively shot ourselves in the foot by purchasing the first two properties in our own names?

Your thoughts would be much appreciated.

Cheers,

Simon

Hi all,

Myself and a friend are thinking of starting a renovating for profit business and I have a few questions regarding finance, however just a few points to make sure you all know where our heads are at. We think that my friend will need to keep working while I renovate the properties, until the banks can see that the business creates enough money to service the loans, then he will quite his job and we will both work full time in the business. Now to the questions:

1. Will the banks lend to us if the income we earn is through selling the properties that the loans are for?

2. I imagine we would need to go down the path of low doc loans?

Thanks for your assistance in this and i am sure there will be more questions that arise. I also have a post up in the legal side of house in regards to setups and taxes.

cheers.

I have a home loan with a 5.2% variable rate and offset account.  Basically, I am wondering is it necessary to have the offset account home loan for taxation purposes (as I claim tax deductions for the properties home loan interest expenses).  I have heard it is is complex to not have an offset account as when you take money out of a redraw home loan account it makes things messy for taxation reasons.

However, a lot of the cheaper loans don't have an offset account and I'm looking to change to a home loan with just a redraw account.  If I change to another loan with just a redraw and no offset account and regularly have money coming in and out of the redraw account, will this create a mess come taxation time?

Thanks in advance for your help.

Thanks guys.

Terry I had a look at the section you pointed me to, covered lots of areas simaler to mine, but  more from an angle of making a PPOR an IP.

I will keep on digging.

If anyone out there does have a dedinative answer or has been through this scenario I would live to hear the result.

Cheers