Hi all
Sorry if this has already been posted, I have looked through a couple of pages on the forum and can't find what I'm looking for.
I have just started a SMSF and would like to borrow money to purchase properties. How do you go about doing this? I have looked on CBA website, it said that the SMSF had to have a minimum of $250K-$300K balance. I have $133K. I read something about Instalment warrants in a SMSF book or setting up a unit trust. Things change so quickly, not sure if this is up to date or not. I have a company and trust structure set up and the same company is trustee for the SMSF.
I'm hoping to buy 2 properties around $200K with 20% deposit. Are interest rates for SMSF the same interest rate as investment/PPOR loan or different?
Another unrelated question – I have just retired (42, self funded) and would like to borrow money to buy properties, is this possible in this climate, to borrow money and not be emloyed? I should of secured a LOC before I left work! I have no investment properties at the moment, no debt whatsoever and a nice little nest egg sitting in the bank very lonely!
Thanking you in advance
bfree2live
Hi bFree2live
Good for you on early retirement. I did the same thing at 40 thru rental income but have to say after 6 months had to go back to work as I was totally bored so started up my boutique mortgage brokerage.
If you want to shoot me an email I can send you an Ebook I wrote earlier in the year on SMSF’s.
I am in Canada on holiday but still have the PDF copy on my tablet so no problems.
You certainly don’t need 250k plus although with someone like CBA they may insist on this.
They certainly are not a lender I use in the SMSF borrowing sphere.Without some further hard data in your current income it is difficult to advise you much further in relation to borrowing capacity etc but safe to say it can be done. Lending location might be an issue all depends on the suburb / post code you intend to purchase in.
Sure we can find a way around it.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks Richard,
Yes, starting to get a bit bored now after only 2 months! Nearly have my real estate licence, (just thought I should get it!!) looking into a small development at the moment.
At this stage my mortgage broker is looking into SMSF loan for me, if she can't help me I will contact you. I had previously asked a financial advisor that my accountant recommended and he was going to charge me $275 an hour. I thought surely I don't need to pay that to find out about a loan? He said it was very complicated! Enjoy your holiday in Canada
Bfree2live
Getting a SMSF loan is not really much more difficult than a normal loan in personal names. Setting up the strucutre and understanding it is slightly more complicated, but even this is not too much for the average person.
But the more complicated it is made out to be the more fees that can be charged!!
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
If your broker has told you he/she is "looking into" a smsf loan for you, um…
I'd be wanting to hear from my broker that they knew precisely which lender to approach based on my circumstances, given that he/she has put through tonnes of successful smsf property loan applications previously.
Has your broker got experience in doing this? It's quite expensive to get it wrong.
I purchased a property through my smsf using Richard Taylor (who posted above) as my broker.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Agree Jac there are only 12 or 13 players in the SMSF market and most of them charge like they were processing a Commercial loan with the attached fees and charges.
I can think of maybe 3 lenders I would look at for a SMSF loan and would steer well clear of the rest and this covers the Big 4 Banks.
Course Jac you got special discounted rates and extra service as one of favored Vic clients.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks JacM
My broker is very experienced and I have been doing business with her for a long time. But I will definitely keep Richard in mind.
bfree2live
b.free2live – good stuff. Just be really sure she is experienced and successful with SMSF loans rather than just standard property loan applications lodged under a person's name.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Hi b.free2live,
SMSF loans are extremely common.
Fixed interest rates start from 6.44% per annum fixed for 3 years and 6.99% per annum variable.
$100K deposit will get you a $400K purchase.
All you need is to add a bare trust to your SMSF.
Not sure if you are aware you cant construct in SMSF.
Passive income can be used to raise debt to purchase investment property outside superannuation.
<moderator: delete advertising>
Regards
Matt George
Thanks Matt
Sorry Matt that clearly isnt correct as you most certainly can construct in a SMSF. I have 1, 2 or more properties which i own in my SMSF apart from properties i own personally and i have constructed Strata Tilted, developed etc all of which is perfectly legal if the Trust Deed allows. What you cannot do is be seen to be running a business. Difference is you cannot borrow from a standard banking lender using a Security Trustee Deed however you can certainly do so under SISA thru a 3rd party arrangement. We do a deal a week at the moment for SMSF lending everything from 100k small resi loans to 2M Commercial lending and as a Financial Planner encourage most if our clients with SMSF to consider it. Unfortunately we do find many standard mortgage brokers do not fully understand the legal requirements if SISA hence i wrote an eBook on the subject. Cheers Yours in Finance
Richard Taylor | Australia's leading private lender
$100K deposit will get you a $400K purchase ?? $80k is sufficient for an 80% lend, which is certainly achievable through some smsf lenders. $100k would get you deposit and also stamp duty.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
