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  • Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    I have access to a new lender that claims to lend based on value rather than contract price. I haven’t used them yet but beleive the LVR must be less than 80% LVR.

    eg.
    Val $100,000
    PP $90,000 they will lend you 80% of $100,000

    The trouble is getting it valued at this higher price. The valuer will see what you are paying for it, that would make it harder (but not imppossible) to get the valuation to stack up.

    These loans are financed by private lenders and the rates are generally a little bit higher than normal.

    If you give me more details I can find out more for you. I would need to know if it is a low doc loan or if you are supplying finacials, and the post code and rough population if it is regional.

    My work email is [email protected]

    Terryw
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TerrywTerryw
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    @terryw
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    Post Count: 16,213

    There may be a way to make the non-deductible dedcutible.

    Steve Navra has suggested that if you were to use his ‘cashbond’ strategy it could help. This is what i remember:
    -Get a cash bond (annuity) securing it on the investment property
    – do this for the purpose of increasing your borrowing capacity (with a tax ruling to this effect)
    -Place all of the income from your annutiy into a 100% offset account against your homeloan.

    It doesn’t happen all at once, but the balance of your home loan decreases very quickly, you get to claim a deduction for the extra interest on your investment property to pay for the annuity and your borrowing capacity increases etc And you get to keep your property and get access to any future capail gains.

    Regards

    Terryw
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    Hi Tim

    I just checked a couple of loan application forms and neither asked for information on loans the application has guarranteed. (But I beleive some forms do ask). So I guess you would not have to supply that information if it is not asked.

    However when the lender does the credit check they will see inquiries done for all loans that you have guarranteed. They would then possibly ask questions. (As a broker I get this all the time from lenders. Sometimes clients have paid out loans recetly, or sometimes they have not told me. One person even got knocked back for non disclosure of a loan). So it could work for a while, but what would you say if they asked?

    I’d like to find a way around this tho. Anymore thoughts?

    Terryw
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    Thanks Andrew! Thats good news.

    Terryw
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TerrywTerryw
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    @terryw
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    Post Count: 16,213

    Hi Sooshie

    What is a ‘slient salesman?

    Terryw
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TerrywTerryw
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    @terryw
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    Post Count: 16,213

    The trouble with doing multiple structures is that as Director of a company, you must guarrantee the loan thru that company. So even if you set up another company, buy more property you will have to keep guarranteeing the loans. You would legally have to declare all loans you have guarranteed to the bank.

    Terryw
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TerrywTerryw
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    @terryw
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    Post Count: 16,213

    Boris

    I hope you are right, but…

    Usually the beneficiaries are listed vaguely such as any spouse of X (Tustee), and children, relative etc. So if the trustee changes, then the beneficiaries will also change.

    Terryw
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TerrywTerryw
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    @terryw
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    Post Count: 16,213

    Here are some thoughts

    Lenders all start to get a bit worried when the rental income starts to be more than your other income. They often then say you are too rental reliant at this stage and will lower the LVR and ask you to put more money into the deal.

    You will always have to prove serviceabilty. Even with low doc loans you must state an income and if it is too low, you will be knocked back. (You don’t get a second chance either).

    And the mortgage insurers have limits on what they will lend people. I beleive it is about $500,000 and there are only 2 LMI companys now. So that make it about $1 mil in lending if your loans are mortgage insured. Many of the low doc loans are mortgage insured-even when they are below 80% LVR.

    There are private lenders that will lend based soley on the valuation, but they will generally lend only 70% and the interest rates are around 8%. You can increase this to 80% by giving a second mortgage and paying about 16% on this extra portion.

    I think that after you are going for a while, you could argue that you are a property ‘business’, and as such there will be different lending requirements. I have heard of people with $60 mil in property loans.

    Terryw
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TerrywTerryw
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    @terryw
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    Post Count: 16,213

    Go for at least a 25% margin. There are always going to be cost blow-outs and unforeseen expenses, so you need this much to make it worthwhile

    Terryw
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TerrywTerryw
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    @terryw
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    Post Count: 16,213

    Hi Boris

    Steve, if this is classed as a resettlment of the deed of trust, then this may trigger the payment of stamp duty as the beneficial owner of the property has changed and it you could be up for capital gains tax. Is this not the case?

    And I am not sure what would happen to the loans (if any) held by the trust. Would they have to be discharged and retaken out in the new trustee’s name?

    Terryw
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TerrywTerryw
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    @terryw
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    Post Count: 16,213

    What about if you used a LOC as deposits (lend to your trust?) for your wraps. The when they cash you out, you use the cash you receive to pay off your home loan, without paying back the LOC. That way you are still able to deduct the interest on the LOC and decrease you home loan quicker.

    If you had say 10 wraps and they cashed you out on average every 2 years, this could really add up.

    eg $100,000 house. $20,000 loan from LOC and $80,000 loan. wrap it for $120,000. You will get +ve income in meantime which you can out off your home loan, but when they cash you out you should get $40,000 cash. Put this off your home loan, and increase you LOC by $40,000 and do again.

    Don’t know how the ATO would view this tho.

    What do you think?

    Terryw
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TerrywTerryw
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    @terryw
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    Post Count: 16,213

    make sure you put yourself down as the contact for access to the building, so you can be there when the valuer comes around. Talk up the property.

    Show him/her figures of all the recent sales etc. Tell him what you think it is worth (but add about 10%). Maybe say you need it to be valued at $X for the finance to get approved etc.

    Also ask him what you could be to increase the value of the property. eg add carport etc.

    Terryw
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TerrywTerryw
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    @terryw
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    Post Count: 16,213

    I use a Real Estate agent in Victoria to do all of my wraps. He sets them up and finds the ‘tenants’, then manages the property for me, deals etc. I think you should approach some local agents about it.

    Terryw
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TerrywTerryw
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    @terryw
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    Post Count: 16,213

    Hi 11111

    This won’t help much, I thought it would be, but heard from an accountant that it is a capital expense and only claimable on selling the property.

    But then when I did my tax return, my accountant claimed it all in that year.Which was good as I got a lot back!

    Terryw
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TerrywTerryw
    Participant
    @terryw
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    Post Count: 16,213

    It might be an idea to get the 90% LVRs while you still can. As you become bigger with more properties, it will be harder to get higher LVR loans.

    Another thing to think about maybe??

    Terryw
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TerrywTerryw
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    @terryw
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    Post Count: 16,213

    MCW

    I beleive that a is only corect for property in ACT and b is correct for property elsewhere.

    Terryw
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
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    Profile photo of TerrywTerryw
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    @terryw
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    Soma

    Yep. He has broken the lease and lost his rights under the option agreement. The court order that I have actually agrees that he abandoned the property on a certain date and this gave me the right to repossess the property..

    Terryw
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
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    Profile photo of TerrywTerryw
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    @terryw
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    David U

    Just give them a call – or search the web site first. You may have to go into a branch to do the paper work. They would have to order a valuation which could take a few days, it could be done in a couple of weeks, but knowing banks better allow double that. Shoudn’t cost you too much. Maybe try to imply that you are thinking of changing banks…

    Terryw
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TerrywTerryw
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    @terryw
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    Sooshie

    Why are the interest rates different?

    Terryw
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    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TerrywTerryw
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    @terryw
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    Post Count: 16,213

    Hi everyone. A bit of an update.

    I have finally found a company willing to take it on. Professional Collection Services, http://www.profcoll.com.au .

    They do recovery on a commission only basis with very reasonable rates: 15% on up to $5000.

    They are onto my case and I will let you know how it goes.

    Terryw
    [email protected]

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://structuring.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

Viewing 20 posts - 16,061 through 16,080 (of 16,113 total)