I wouldn't worry about your PPOR loan too much. $50,000 at 6% pa is only $3,000 in interest. Just keep utilising the offset account – all rents and incomes in there. Do you have one?

Take the opportunity now to uncross your loans as well and look at extending a LOC on your main residence. It could be possible to borrow from this to pay the expenses on your IP and keep your cash in your offset to pay off the PPOR loan quicker – but discuss with your tax advisor as the ATO are looking into this now.

A

 better deal as in this one?

1. You could negotiate better terms for yourself.

or

2. Invest into another venture. But you have to understand that it is extremely dangerous to invest in a private company – you essentially have no security.

Be very careful how you proceed.

I have a client currently being sued over a deal, similar in some ways, that didn't proceed. They have joined his wife in proceedings as she attended some meetings. The intention of both parties was to set up a company for trading and owning stock, but they are suing my clients in their personal capacity. Wife was joined as she is the one with the assets.

jhogan. Too late I'm afraid.

Did you have any other funds in the account the borrowed money went into? Domjan's case is the authority that the interest won't be deductible in this case…

I think it is 5 years

Different

Joe, you only pay after the work has been completed – unless money goes into a trust account.

Thanks Jamie.

With property it is best to use a lawyer from the state you are buying in. I wouldn't act for a property matter in SA as I am not familiar with state laws there or the procedures etc.

I don't know how you should choose your lawyer, but someone with a experience in the area you want to focus on – area as in topic. You can also look for an accredited specialist in property or just someone that seems to specialise without being a formally designated specialist.

Coordination 10 people is hard. Have you ever tried to organise a group of 4 to eat? what, where etc is not easy. Imagine with 10.

1 will almost certainly lose interest and want to pull out etc. Constant hassles like this. Choosing a property that everyone agrees on will be a nightmare. Except if they are just shareholders and there is one director who decides maybe.

Trusts effect on borrowing capacity would be similar. Each unit holder would be required to provide a personal guarantee as well as the trustee or company directors of teh trustee. Each guarantor would be guaranteeing the whole loan amount. So if you bouhgt a $500,000 property you may 'own' $50,000 of it but you would be guaranteeing $500,000 loan. Each subsequent loan would look at you owing $500,000 but only getting an income of 10% of the rent…

Heaps of issues but income tax probably won't be much of an issue.

Does this breach the Corporations Act managed investments without a prospectus?

How many directors?

How many shareholders?

Who would be shareholders?

CGT 50% discount

Loans – who guarantees?

death – what if one shareholder dies?

bankruptcy – shares fall into hands of creditors.

Divorce – shares fall into the hands of a spouse, family court orders over company etc

shareholder's agreement for various issues

injecting money – loan or equity?

etc etc