Investment Property Unbundling

[Prop1Member@prop1Join Date: 2008Post Count: 5]

January 28, 2008 - 5:22 am

Hi All

I am fortunate to be one of six beneficiaries of a trust which owns three commercia/industrial properties,which are in the process of being moved into a company structure. These properties formed part of a lengthy undundling process of a group of properties owned by various trust and companies.The properties are located in South Africa.  I would like to either be payed out my share or alternatively to acquire maybe one or two of the less valuable properties. There would be a small difference of about $100k which I would need to pay in(according to valuation) in order to acquire these properties. I would eventually want to sell up and invest in the Australian property market. My question is whether there are any property/financial experts(based in Melbourne) who would be able to help me crunch the numbers and plot the way forward and whether there are any Australian lenders who would do international property loans of this nature? 

I would be grateful if anybody could shed some light on the above or put me in contact with a suitably qualified person. 

Thank you all in advance
Prop1

P.s Great forum…educational and entertaining

[Richard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,024]

January 28, 2008 - 5:54 am

Hi Prop1

Firstly welcome to the forum and I hope you enjoy your time here.

Unfortunately there is no Australian based lender that will offer you a loan secured against an overseas property unless you have other property assets over here that can be offered as security.

Richard Taylor | Australia's leading private lender

[Prop1Member@prop1Join Date: 2008Post Count: 5]

January 28, 2008 - 7:08 am

Hi Richard

Thanks a lot for your reply, 

I don't have anything here yet, I could possibly go through a South African lender in that case but not sure how it would work with me in living in Aus.  Is it possible to find  money elsewhere, maybe privately if need be?  The loan amount would represent approximately 25% of the value of the properties. The bulk of the income would go to paying off the loan, which would roughly take five years but definitely within ten.

One more question , in the event of me being payed out, (this is quite possible)how would one work out fair and reasonable value? The other beneficiaries are prepared to sell the two mentioned properties on the open market to pay me out. If they sold for more than the valuation, would that mean a percentage increase would need to be applied to the valuation of the remaining property to reach a pay out figure and obviously vice versa? Or would it be fair that what ever extra is made over and above the valuation figure goes to the remaining beneficiaries but if less than valuation I get valuation figure? 

Not sure if this is your area of expertise but if not maybe somebody else could reply.

Thanks again

Prop1

[Richard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,024]

January 28, 2008 - 7:24 am

Hi Prop

Unless you can find an SA lender to lend to an overseas resident i think you will struggle.
Dont think you would find an Australian Private Lender to advance funds for overseas property (I know we wouldnt).

No not my area of expertise but in saying this i have purchased partners out of a couple of companies before and this is not disimilar. IMHO i would suggest you obtain say 2 independant valuations and then deduct the normal selling costs i.e agents, legals etc and divide the net balance by the number beneficiaries. 

You may apply some form of weighting to mean those beneficiaries that sill own the property can buy out the other parties share at a discounted price as they are holding for the long term.

I guess it all boils down to what someone is prepared to accept to transfer over their share.

Richard Taylor | Australia's leading private lender

[Prop1Member@prop1Join Date: 2008Post Count: 5]

January 28, 2008 - 8:58 am

Hi Richard

Seems fair enough. Would one use a valuation company or realestate agents. My understanding  is that the valuation  to a degree is determined by the purpose of the valuation(capital gains,investment,selling etc). Would this be correct and if so what would be the most equitable way to go? Would the valuation costs form part of the selling costs or would that be for my own personal account? Our current valuation is a year old, Feb2007,do you think it wise to get a current valuation,Feb2008.

Cheers

Prop1

[Richard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,024]

January 28, 2008 - 9:08 am

Prop

Yes i would get a current independant valuation from a registered valuer.

Certainly the costs of the valuation should come off the sale price.

Richard Taylor | Australia's leading private lender

[Prop1Member@prop1Join Date: 2008Post Count: 5]

January 28, 2008 - 9:17 am

Hi Richard

Thanks for all your info, much appreciated

Cheers
Andrew