Hi All,
Advise on the following most welcome.
I am in the process of settling on a Reno/Development site in VIC. As myself and my investment partner are currently working O.S. I will return to Australia, and oversee the project management of the site.
We have set up a LOC for our 20% deposit and closing costs, also for the reno costs and living expenses for myself to manage the project. We intend to renovate the existing house then sell and pay down the initial loan. While this is happening, I will be applying for a DA and BA to develop 2×3 bedroom units on the sub-divide land at the back of the site. We believe we have purchased at the right price, and that there is a good profit margin in utilizing this strategy.
We will look for similar sites/projects and hope to do 3-4 per year. How we can finance this; is my investment partner will secure the 80% loans, and I will pay the 20% deposits and closing costs from LOC I already have in place.
Any thoughts on this kind of project, and what do we need to look out for?
Regards,
Sean.
You need careful planning and consider the following:
– ability to get finance (most important!) without finance you are stuck
– structure. Sole name, joint names, trust – unit or DT, or company (no).
– injecting capital to the structure – gift or loan (probably loan, but from whom? interest deductibility considerations too)
– asset protection – think of divorce, death or bankruptcy of one or both of you
– land tax
– stamp duty
– GST
– CGT
– Income taxTerryw | 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
Great info from both of you. Thanks for sharing ….
You must be logged in to reply to this topic. If you don't have an account, you can register here.
