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I am a beginner and just making plans to get started as a property investor. I recently purchased the “WealthGuardian” package. I am planning on setting up a new business structure for acquiring positive cashflow properties and I intend to go for the “Complete Asset Protection Model” as recommended in WealthGuardian.
1. As a newly setup structure with limited capital and/or equity, would there be difficulty in obtaining attractive financing for the initial properties purchased?
2. I currently do not own a home. I plan to purchase a home office and to pay it off outright. Would there be advantages if I purchase my home office as a Director of a Trustee company on behalf of the Trust instead of purchasing it as an individual? For example, could the equity in this property be used to obtain more attractive financing for future purchases of investment properties? (I am aware that this would disqualify me from getting the CGT discount if I were to sell this home office in the future).
3. If, as the Director of the trustee company, I do not own any property as personal assets, would this be a disadvantage when seeking attractive financing? i.e. I would not be in a position to provide any personal guarantees.I know I should be seeking professional advice; but any initial thoughts or ideas from any of you folks out there would be most appreciated!
1. Setting up companies and trusts will not affect your borrowing capacity as you will be required to personally guarrantee the loans. So the banks will assess the deal on your personal income. There is no difficulty in borrowing using a brand new trust or company structure.
2. There would be not advantage, from a borrowing point of view, in buying the property as trustee. It will still have the same amount of equity available whichever name you bought it in.
3. Holding no property in your persoanl name may work against you (slightly) as you will have no assets the lender can go after if it all goes wrong. But you would still be in a position to give personal guarrantees.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
