Hi can anyone tell me how it works?
What balance do you need to start purchasing a IP using your SMSF. Can you use the rent and super contributions from your employer to make the payments for the IP loan.
I'm not sure why you would want to do it, but you can, in limited circumstances, borrow by using instalment warrants to purchase an asset for your SMSF. The borrowing has to be non-recourse, so the amount you could borrow would be limited. This change is faily new, and could be a potential minefield. Have a look at this Q&A from the ATO.
Make sure you get good, written advice before you do this, as the consequences of mucking it up are severe.
The LVRs are generally up to around 70% with rates much higher than residential, around 9 to 10%. I have never done one and don't want to because of the complexity – you would need a superannuation expert to guide you through it all. http://www.trustdeed.com.au has some good strategies regarding SMSFs.
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
It's also quite expensive, as I gather, because the "instalment warrant" (code for borrowing by super funds to buy property) rules are reasonably new and exotic. The last time I look, the lawyers were charging something like $8K to set one up.
Eddie
[email protected]Eddie
You must have got hold of one of the cheaper lawyers.
I have settled about 8 loans for clients and the legals fees for establishing the Bear Trust and associated Company varied considerably (between around $8500 and $17000).
As for the Broker we are are paid the same as a normal loan. The time spent arranging the loan with the mountain of paperwork doesnt make it viable anymore.
Richard Taylor | Australia's leading private lender
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