Hi all, new here and it looks to be a great community.
The reason for my post is that I wish to start investing in property with a mate. We have known each other for ages and have the same mindset about property and we have also lived together in the past. We live in SE QLD.
The situation is we both live with our girlfriends at their parents home and that I already have a PPOR which is currently negatively geared and my mate is yet to break into the market.
How can we go about partnering without him loosing FHOG?
Should he buy a PPOR first then we invest together?
Should I keep my PPOR as its currently negatively geared?Cheers,
AddsAdds
I wont give you the lecture about investing with friends speil as it sounds like you are both good mates.
You say that you live with your g/f but also you have a PPOR. I am assuming that it started out life as a PPOR and that you are now renting it out.
If you buy an IP together then this will not hamper your friends ability to obtain the FHOG down the track on his own PPOR as long as he purchases this on his own or with someone else who is eligible.
Now onto what you will purchase i assume you are looking for this to break even or be positively geared if possible. if this is the case then you probably should consider a Trust structure which will give you some flexibility and good asset protection.
Additional information would be required to give you further informed advice.
Richard Taylor | Australia's leading private lender
Thanks for not giving me the spiel, thats what I tried to avoid with the description
Yes thats correct it was originally my PPOR, and I thought for tax purposes it was still called this as I dont own another property? Is this now an IP? Is there an impact on this 'what I call' PPOR when I buy an IP with a mate?
As for the FHOG, my mistake I mis read the eligibility criteria from osr.qld.gov.au.
You are correct about purchasing netural or postively geared property. Regarding Trusts from some of the books I've read its suggested just to use joint names/common tenants? I will further research trusts.
It seems a lot of people have difficutly with trusts, can you/or anyone suggest a good website/book/resource that has all the trusts?
You wont find much written publically about Trust structures because every client is slightly different.
If you havent done so i would make sure that the loan on your own IP (Yes if it now an IP) is an interest only loan and linked to a 100% offset account.
Also might like to use a Buy with friends Agreement. We normally suggest this for clients and draw it up for them.
I appreciate your are friends but everyone nows how things can go wrong when money is involved.Richard Taylor | Australia's leading private lender
I invest with an investing partner and we have a joint venture agreement drawn up by a solicitor to outline everything – we then do a partnership return at tax time and everything is split 50-50. You can even do up a JV agreement between trusts. Although it sounds complex to set up, it makes things very simple down the track as each parnter knows their obligations and there are no disagreements as all was agreed on at the start, also, no disagreements on what happens to the money as it all has to be taken out of the partnership – half each – at the end of the financial year.
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