Why?

Many things to consider.

Firstly is borrowing capacity. All going in together may hurt this.

2nd, flexibility. A discretionary trust is the way to go, but if you have separate families, then maybe a unit trust with fixed percentage. each family can then have their units owned by their own discretionary trust.

3rd, protection. Each person needs to protect their assets and limit guarantee. having one person guarantee will limit risk and preserve borrowing capacity. Others can be added if need be. After settlement you could lodge a caveat so this will prevent it being remortgaged or the loan increased etc. Each family could do this to protect themselves.

Manoj

Today I received a newsletter from http://www.trustdeed.com.au. This company is a competitor to Chan and Naylor in the supply of trust deeds. For those not on the newsletter, Manoj forwarded Michael's reply above and an article outlining Mr Yardney's past to his whole database of subscribers.

Manoj, what has this got to do with trust deeds? This is no way to do business.

I had previously recomended people join this newsletter and use Manoj's services, but because of this I no longer will.

I would set up a LOC and concentrate on repaying the remaining $80,000. Once you have done that then you will have some spare cash left over each month. So I would look at using a discretionary trust. You can start gifting to the trust so that it builds up some funds and then start buying new investment properties. Use interest only loans with 100% offset account with the trust's cash in there saving interest. The properties will hopefully start becoming positive geared very quickly and this income can be distributed to the lower income tax earner.

If you start buying in your name now for negative gearing benefits, then you are just creating a time bomb. You may save a little but of tax for 1 or 2 years, but then suffer by paying top tax rate tax on your rental incomes and CGT after that.

You would need to get some legal advice, draw up agreements and trust deeds etc, so it is going to cost you a bit, but it should be a lot cheaper than stamp duty on a transfer.

An option is a simple thing. You are just entering a contract in which you have the option to purchase at a later date. It is just how you use it or structure the deal is where you can make money. This you can learn from the courses, but really there is not much to this either. bear in mind it sounds very good in theory, but will be hard to implempent.

what do you mean by vendor finance? If you mean an installment contract, then this may be difficult. You would probably need at least 20% equity to avoid LMI. Even then it may be difficult. I tried to do it for someone a few years ago and the bank wouldn't lend on value but just on the initial contract price.

If you mean paying out a second mortgage, then this should be easier.

BB

Have a reread. That strategy won't save you completely because you won''t be able to mortgage to 100% with a bank. Look at mortgaging to a trust.

You also should consider the values of the properties. If you have plenty of equity merely cross collateralising the loans won't help much, you need to have the mortgage large enough to cover the whole value

You probably mean CGT. Capital Gains Tax?