All Topics / Finance / 30 properties before 25, finance???

Viewing 20 posts - 61 through 80 (of 103 total)
  • Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    Many reasons to use multiple trusts: – off the top of my head

    1. Asset protection – not keeping all your eggs in the one basket.

    2. Succession – easier to split up assets between family members when you want to. Imagine if you had 2 kids and one big trust.

    3. Life – a trust has a life of 80 years, so if 5 years has passed, then you can form a new trust and extend the life of hte asset being held by another 5 years.

    4. Improvements to deeds – trust deeds need constant updating, so having a new deed would mean it would be update

    5. changes – you may want to include a friend in a project who would otherwise not be a beneficiary

    6. segregation – you may want to segregate premarital trust assets from post

    7. tax flexibility – you would have greater tax flexibility if separate trusts. If one trust then capital losses may be automatically offset by capital gains within the trust while a beneficiariy has an offset which could be utilised. If separate trusts then you may have the choice of which way to go. If one trust then no choice.

    etc

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

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

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Terry has laid it out perfectly.

    Trust me it does not work and no lender will allow it.

    The only way you can buy multiple properties is pay down debt, reduce liabilities, increase income.

    Obviously lower interest rates can help but it all boils down to structure.

    Structure it correctly and you should be able to keep on buying, structure it poorly and you will be in problems before you start.

    My properties are held in 5 DFT's with a Corporate Trustee. Not for everyone but suits my investing.

    Next year i will have paid down the last of the loans secured against the properties so they will be unencumbered.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099
    scha9799 wrote:
    I just couldn't understand how people can get the finance continuously without hit the finance brick wall.

    Got nothing to do with trust or personal name.
    You could easily hit this “wall”/problem under a personal name purchase.

    As Terry and Richard mentioned, it all comes down to;

    1. Structure
    2. Debt level
    3. Serviceability
    4. Income
    5. Exposure limit with the same bank/LMI

    Regards
    Michael

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

    Profile photo of TaylorChangTaylorChang
    Participant
    @scha9799
    Join Date: 2009
    Post Count: 234

    Thank you Terryw, Richard, and Michael.

    but Richard,
    "Structure it correctly and you should be able to keep on buying, structure it poorly and you will be in problems before you start. "

    what do you mean correctly ? I guess my question is how do I know if i structure correct ?

    I have 1) IP loan is about 277K and rent is 360 pw and also 2) IP loan is 540 K and rent is 500pw.
    1) is under my personal name 2) is under both my name and my partner's name.
    my income is about 60K

    How do I know if it is correct structure ?  should i setup a company or trust and start purchase IP under company/trust ?

    TaylorChang | Finance Broker
    Email Me | Phone Me

    Home loan | Commercial loan | 0414 691 517

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Ok assume you have no PPOR.

    Are both loans standalone and Interest only.

    Do you have 1 100% offset account linked to at least one account.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of Mezma3Mezma3
    Participant
    @mezma3
    Join Date: 2011
    Post Count: 6

    Hi Richard,

    Would really appreciate it if you could email me your article [email protected].  Really looking forward to settlement on our first IP, which you played a very big part in organising the finance for us  We found your knowledge astounding and you were so helpful throughout the entire process

    Thanks a million once again.

    Mery

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hi Mery

    Sure not a problems at all.
    Glad we were able to assist on this one and I am sure the next one wont be too far behind.

    Happy New Year to you both.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of SMY7484SMY7484
    Member
    @smy7484
    Join Date: 2012
    Post Count: 9

    Hi Richard

    Could you please send your article to me at [email protected].

    After reading the above threads, is your accountant the most suitable person to advise you on the 'right structure' in order to keep buying?

    I am having 3 IPs in my own name, and my wife has 1 IP in her own name; Is it correct I will easily hit the wall to keep buying under our own name? I would like to structure it correct before the next one comes though.

    I am confused, some experience investors advised me to keep buying under my own name to take advantage of the tax depreciation.

    Thanks

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hi Ryan

    Just emailed you the article.

    Yes you could easily hit the servicability if the loan structure is incorrect or the loans are cross collateralised.

    Regretfully unless your Accountant holds a Credit License or is a Credit Representative he will not able to advise you on your loan structure or serviceability as this now the domain of a Licensed Mortgage Broker post NCCP.

    Buying in Trust wont increase your borrowing capacity and in some cases will reduce the amount however there are many reasons why investors do buy in Trust some of which have been covered in this post.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of SMY7484SMY7484
    Member
    @smy7484
    Join Date: 2012
    Post Count: 9

    Richard, what an inspiration article about you. Thanks alot, I am definately seeing where I would like to be in the future, that  amount of passive income counts.

    I am planning to buy an IP by the end of this year and I was thinking to consult an experience accountant before my next move. Would you think it is ideal to seek advise from a mortgage broker like you prior to accountant? Basically I would like to know, ideally when should I start to set up a trust or company to buy IP etc.

    Thanks Richard.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hi SMY

    Appreciate the kind words.

    Yes i would suggest you get an indication of what you can and cannot do in the way of your borrowing initially from a Mortgage Broker prior to chatting with an Accountant. I receive emails from so many forum clients whose Accountant has told them to establish or set up a particular structure only to find that they can't finance it or if they can the choices are extremely limited.

    Your Accountant is going to happilly charge you to establish a Trust / Company structure but wont be able to provide you with a Credit advice unless they are Licensed to do so.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of Daneo79Daneo79
    Participant
    @daneo79
    Join Date: 2012
    Post Count: 31

    Hi Richard,
    Can you please send me a copy of your article? [email protected]
    I am a regular reader of API and have learnt a lot from the range of topics covered.

    I have done a lot of research and i am ready to buy my 1st IP. I want to get the structure right from the start.
    When setting up a DF Trust with corporate trustee, do i use a non trading shelf company?
    And who is the best person to set up the trust?

    Profile photo of Mick CMick C
    Participant
    @shape
    Join Date: 2010
    Post Count: 1,099
    Daneo79 wrote:
    Hi Richard,

    When setting up a DF Trust with corporate trustee, do i use a non trading shelf company?
    And who is the best person to set up the trust?

    Yes non-trading most of the time.

    your accountant can set this up for you, but you may want to check that your accountant specialize in the field of property accounting …since there are different fields of accounting…

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
    Email Me | Phone Me

    Same Banks. Better Rates. Served With a Passion.

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

    You should never use a trading company for a variety of reasons.

    The main one is asset protection but another is for convenience.

    When a lender lends to a company as trustee they will take a charge over the company's assets. If the trading company later enters into other contracts this can be a major drama as registering further charges could be a breach of the terms of the mortgage and the company may need the permission of the lender.

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

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

    Profile photo of Daneo79Daneo79
    Participant
    @daneo79
    Join Date: 2012
    Post Count: 31

    Thanks Michael, Terry.

    I thought so, but when reading books, articles and listening to audio books you can't ask them questions!
    A process to suit my circumstances can be formed and shaped through the vast amount of info available today, but even so, you still need people in the industry to bounce questions off.

    Once again, thanks

    Profile photo of simplesimple
    Participant
    @simple
    Join Date: 2006
    Post Count: 237

    I just imagined running 30 x IP’s. Makes me dizzy :) Got 10 tenants and it’s a handful, especially come the tax time.
    Try doing it in such a way that it’s you earning money not banks, agents, solicitors! This means you need higher return properties rather than more of them. Some cash injection at the beginning helps to improve cash flow dramatically on the long therm.
    I like earlier comment from “Shape”.

    Profile photo of Shell HShell H
    Participant
    @shell-h
    Join Date: 2010
    Post Count: 32

    Richard,

    As I emailed to you earlier today – Rod & I cannot thank you enough for sorting out both our new & also our old messed up crazy loans over the past few months!  I don’t know what we would have done without you!

    Could you please send me a copy of the article that you wrote that everyone is asking for a copy of ?

    Thanks so much.

    Michelle

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    30 properties…. that's a lot of rooflines.  It'd be a bit ordinary if all 30 of the roofs needed maintenance at once!  Pricey!

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Hi Michelle

    Was an absolute pleasure to sort the loans out for you and at least setting it up properly means you can proceed on your investing journey at your pace rather than having your Bank tell you what you can and cannot do.

    By the way i openly wanted to say a real big thank you for the lovely bottles of wine.

    Anyway article is on your email.

    Just ignore the grey bits as i normally get those air brushed out lol.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me

    100% Investment Finance now available on selected properties. Email us for further information.

    Profile photo of DubstepDubstep
    Participant
    @dubstep
    Join Date: 2012
    Post Count: 395
Viewing 20 posts - 61 through 80 (of 103 total)

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