All Topics / Legal & Accounting / Property Development using SMSF money

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  • Profile photo of wilko1wilko1
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    @wilko1
    Join Date: 2010
    Post Count: 510

    That's what I was trying to identify with before . Investing your smsf cash into  unit trust of a reputable and reliable 3rd party developer/builder. You still get a slice of the pie. And for alot less effort and also a lot  less risk of not completing the development  due to funding difficulties. Because as freckle said investors provide seed capital rather then being debt captial from the banks..  

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

    The units of the unit trust which are held by the non SMSF entity could be used to raise capital. The units could be charged or used as security, but the SMSF owned units couldn't be mortgaged. But the SMSF could use a bare trust to borrow to acquire the units – but it would be very hard to find a lender willing to lend on this basis.

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

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of GrregGrreg
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    @grreg
    Join Date: 2003
    Post Count: 121

    Terry – I think you have nailed it. We do NOT want to use our SMSF to borrow. The SMSF is just contributing funds. I think I might not have been clear enough about that in my initial post.

    The plan would be that the SMSF simply contributes cash to the deal (through buying units in the unit trust). We would personally borrow from the banks in our own names to purchase our units in the trust. So it is like a JV.

    My concern is whether we can do this as we are all family. I believe there are complications about SMSF and related parties investing.

    Does that sound like a workable plan? Or are there still problems?

    Greg

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213
    Grreg wrote:
    Terry – I think you have nailed it. We do NOT want to use our SMSF to borrow. The SMSF is just contributing funds. I think I might not have been clear enough about that in my initial post.

    The plan would be that the SMSF simply contributes cash to the deal (through buying units in the unit trust). We would personally borrow from the banks in our own names to purchase our units in the trust. So it is like a JV.

    My concern is whether we can do this as we are all family. I believe there are complications about SMSF and related parties investing.

    Does that sound like a workable plan? Or are there still problems?

    Greg

    Should be doable.

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

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    Terryw wrote:
    Grreg wrote:
    Terry – I think you have nailed it. We do NOT want to use our SMSF to borrow. The SMSF is just contributing funds. I think I might not have been clear enough about that in my initial post.

    The plan would be that the SMSF simply contributes cash to the deal (through buying units in the unit trust). We would personally borrow from the banks in our own names to purchase our units in the trust. So it is like a JV.

    My concern is whether we can do this as we are all family. I believe there are complications about SMSF and related parties investing.

    Does that sound like a workable plan? Or are there still problems?

    Greg

    Should be doable.

    And Anthony from A4 Companies seems to know a lot about SMSF structures and investing.
    https://www.propertyinvesting.com/forums/legal-accounting/4347022#comment-284017

    I am a lawyer and could advise on the set up, but it is not something that I do everyday. But better to speak to Anthony I think.

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

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

Viewing 5 posts - 21 through 25 (of 25 total)

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