Forum Replies Created
Brizza, No you can’t. Just add up the total value of the property and the total value of loans and multiply by 90%.
You may be able to go to 95% though.
Terryw
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Crashy where are you? I have one and am in Sydney. the one I have is huge (sorry don’t mean to boast).
Terryw
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Comdom
You can’t just transfer you properties to a trust. They will have to be sold to the trust, this means CGT and stamp duty implications. Do some figures, it may not be worth it.
Really you should be talking to an accountant about this. You would probably need a Discretionary trust or a Hybrid discretionary Trust.
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Property tracker is now available for free:
http://www.otter-software.com.au/Software/PropertyTrackerPages/NEWSBREAKNOWFREE.htmlTerryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I am in Sydney, but the agent is in Victoria. feel free to email me.
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thats good about the craa. I think it probably wasn’t the trust that was the problem?? who did you try?
With an individual as trustee you can get the loan in your own name, and not tell the bank about the trust. it has the same tax consequences. Check with your accountant first of course. I have done this myself-a loan in my name on behalft of the trust.
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I know he had Dave working in the accounting firm making money for deposits. He also probably did many wraps, and would have got the FHOG as deposit at least. If he did 10 wraps then $70,000 would have come in (maybe more?)
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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I agree with crashy. if yo are just 2% short of 20% deposit, just get it from a credit card or borrow it.
And there are many banks that offer 90% loans with no genuine savings-with mortgage insurance.
If you have sold you IP and it is under contract, will you get any money out of that (or have you already included that in your figures?). If so, the bank will be able to take that into account.
Anyway, you could probably negotiate a 82% lvr wihtout LMI. Homeside will do this.
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Getting a loan for a trust is easy. What went wrong? Most banks will do them, some low doc lenders won’t (eg ING and Suncorp), but if you have individual trustees, you loans could be in the individual names instead of the trust. You must have a corporate trustee.
Most importantly, I hope all of these applications don’t go on your CRAA! Did you actually submit loans applications?
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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I sue a buyers agent in Vic, and it has worked out well (many times!).
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Hi JayJay
Yes banks will lend to a new company with no history set up just for property investment. In fact most banks will only lend to non trading companies (ie setup purely for investments) because of the risk involved.
But I agree with Windel, you shouldn’t buy property in a company. Use a trust instead-with a corporate trustee.
If you are both directors or trustees, then you will have to guarrantee the loan. It is really just the same proceedure as getting a loan in your own name. You will ahve to prove your own personal incomes etc and provide a copy of the trust deed.
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Yes I beleive it does. You will need money for deposts, dosn’t really have to be savings. Lenders will lend you 95% intially, but when you start getting a few, the lvr rate goes down. LMI companies have maximum exposure levels. (about $1mil with PMI), so you will have to bring it down to under 80% to avoid LMI.
You could also possibly get the deposits from sources such as friends/relatives, wrap deposits, option fees etc, as well as equity from any growth down the track.
Terryw
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Hi Captain
i know of a real estate agent that does wraps and lease options. He finds the properties, tenants and does all management. all cashflow properties.
Email me and I can give you his details.
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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I’ve purchased 6 properties sight unseen. (i’ve still never seen them). All has gone well so far!!!
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Thanks for the tip guys. I will check that site out. Can you tell me one thing, when you borrow to buy these shares do they do a credit check? ie does it go on your craa?
And Steve Mcknight himself said at a seminar in 2001 that shares out perform property. (But you could gear property more, so it worked out better after gearing was taken into account)>
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Don’t forget Steve was putting in at least 20% deposts, the properties were cheap (mostly), he was selling a few for good capital gains, paying off the loans (reinvesting 1/3 of the +ve income). And he was getting a good deposit for each property that he wrapped as well as the +ve income.
And as a mortgage broker, I can tell you that replicating structures is not a way to get unlimited finance if the banks will require personal guarrantees.
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Yes, you could borrow against the property. but you couldn’t just borrow against your share. he would have to agree to it and you could get a LOC, for eg, but it would affect his borrowing capacity as he would have to be a guarrantor (as his property is being used as security).
I purchased my first IP with my bother too, and it can get a bit messy when each person wants to do something different. I ended up buying my brother out. If you are going to buy something, you might as well buy his share (no real estate agents commission to worry about).
Or get a LOC (or 2, and have half each). And use that as deposits for you next properties.
Terryw
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Delight
I agree, you have probably done your money on the reports. The real estate agent probably wouldn’t want the next potential purchaser getting a hold of it lisitng all the problems.
You should probably use this as your bargining tool. Get at least another $6000 off the price.
AS for low docs, 7.4% is too high. I could probably get you 6.55% or even lower if you have been self employed for 2 years.
Terryw
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There are low doc loans availble whereby you just state your income and no checks are made. But you have to be employed. the average lender will not lend on rental income alone. What happens if the house is untenanted?
There are also asset lends where you are not required to state an income at all. These start at around 65% LVR at relatively normal rates (around low 7%s).
There are also non standard lenders that offer asset type lends up to 80% LVR, but the rates are high. starting around 8% upto 70% LVR and then 16% for a second mortgage the next 10% LVR bringing it up to 80%.
You can also get a 90% LVR low doc, but the rates are over 10%!
Terryw
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Dunno. that’s just the way the market is. I suppose they are much less common than standard houses, so teh market for them is much smaller.
Terryw
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