- bkingsleyParticipant@bkingsleyJoin Date: 2004Post Count: 1
I recently read in Steve's book,with interest, how potentually given you buy a property in a company or trust name and going guarantor instead of borrower, how you can go from bank to bank and keep borrowing. I would have thought banks would do a directors search and furthermore a guarantor would have to declear any loan they were currently guaranteeing? Therefore defeating this option – Am I right or wrong?
No you are right and I believe Steve has clarified this and accepted this in his later publications.MooseheadMember@mooseheadJoin Date: 2006Post Count: 42
While we're myth-busting… anyone care to bust this one?
I've heard… that once a company has 2 years of financial history showing some profit, the company can borrow without any of the directors needing to provide guarantees or declare their personal income.
Moose – Bang on it is just that a Myth.
Assuming we are talking about a private company no lender is going to lend to an entity whereit potentially could have zero security. As soon as the company sells down or disposes of its assets and is unable to pay its debts the Directors can merely walk away with no recourse.Tysonboss1Participant@tysonboss1Join Date: 2007Post Count: 306
I have spoken to a Broker that said some lender's would lend to a company based on their income provided that they had strong Financel statements for 5years, and did alot of hoop jumping, some Lenders also will lend against the purchase cost of a franchise business you own, normally 40% – 50% but up to 90% in the case of the big franchises like mcdonalds,
The 3 main franchise lenders in Oz will not lend more than 70% LVR of the purchase price and all each case require a Guarantee from the purchaser or owner of the franchise.
Non recourse loans maybe acceptable in Commercial cases where the lender can assign the rental income but again the LVR is extremely limited.MortgagemanParticipant@mortgagemanJoin Date: 2004Post Count: 164
Non recourse loans are available on freehold properties through the commercial arms of most of the majors at 65% max. These loans are typically used for syndicates or unit trusts with a number of unit holders. However, the issue is generally the servicing as for non-recourse loans, the rental income is the only income that can be taken into consideration. Therefore you need a strong yield on a commercial property to borrow 65%. You will generally also need a strong borrower/s. No lender as far as I know will lend non-recourse on a business only. It would be crazy to do so.
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044
email: [email protected]ScrufffMember@scrufffJoin Date: 2007Post Count: 4
I want to get into property investment and I am currently reading and studying Steve's book 260+ properties in 7 Years. Please tell me where I can find all the details about these trust accounts, like setting them up, risks, pros and cons etc. I would like to keep my personal and investment assets separate for protection as Steve described. I think it makes good sense.MortgagemanParticipant@mortgagemanJoin Date: 2004Post Count: 164