Fullout

Don’t do it. It is not worth the very high risk of losing all you money for a mere 25%.

A lot of HK disciples recently lost all their money when the developer went bust-some fraud involved as well. Some lost $300,000!

try
http://www.chrisbatten.com.au
http://www.taxlegal.com.au

Terryw
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There was a whole development that went bust recently. Many people have lost $100,000 and more in this mezzanine finance investment. And the company involved was allegedly intorduced to investors through a ‘investment’ company famous for Mezz finance.

Terryw
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I also rent while at the same time owing many investment properties.

One good idea is to live in one of your rental properties as your PPOR for a short time. It is then CGT free if you sell (within 6 years)-even if you rent it out. At the same time run some sort of business from home so that you can claim part of the rent as a tax deduction. And you will be able to rent for a fraction of what it would cost you to own the same property.

Terryw
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hwd007

You can make some good money doing this. One of my clients is doing it now and I managed to get him 100% finance for the whole thing. He has purchased some blocks of land off the plan (ie before subdivision) and is going to build duplexes on the blocks. We could get him finance based on the end value of the townhouses and there was enough profit in it for him to capitalise the interest until completion.

What you need to do is get the DA application in as soon as possible as this is what slows you down (maybe before settlement?). It could take a month to get through and cost up to $10,000. You will also need a fixed price contract for construction so the price doesn’t blow out, and arrange finance. You could even sell off the plan to minimise your risk, or go for it. if their is enough profit in it, you could keep the lot as the LVR at the end should be around 70% or less (otherwise there is no enough profit in it!).

Terryw
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hwd007

Good try again. You can sell it for $1 if you wish, but you must pay tax and stamp duty at the market value.

Terryw
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Red

I think with a Hybrid trust, the unit holder can borrow to buy the units, and the interest on this is able to be offset against the unit holders other income. check out http://www.chrisbatten.com.au

Terryw
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There are a lot of Mortgage Brokers out there that don’t know what they are doing. There are many lenders that offer 90% loans without genuine savings. And I know of one with 95% LVR with no genuine savings.

Terryw
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i used to work in Japan, and I know the NAB and other Aust banks will actually lend you money for property in Aust in Yen at Japanese interest rates (1 to 2%). But you must be working over in Japan earning yen. I think there are a few people using these Yen loans.
Over the past few years the exchange rate has gone from about $1=60Yen to $1=80Yen.
So if you had taken out a $100,000 loan it would have been 6,000,000 Yen which is worth $75,000 now. I suppose if you are earning Yen it doesn’t matter so much.

Terryw
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Hwd

Sure it is legal to pay off someone else’s debt. But in Australia, you can’t assume someone else’s loan. (I think you can in America).

And it is legal to sell for undermarket value, but you must pay stamp duty and CGT at market rates-otherwise it is fraud.

And I don’t knwo about you example above, I don’t think it would make a difference in cashflow etc.

One good reason to pay off one loan and increase the other would be get completely clear the mortgage on one and get the title deeds back. it give the bank less security.

Terryw
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