Forums / Property Investing / Creative Investing / what entity should I buy my IP’s through?

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  • Profile photo of tom123tom123
    Participant
    @tom123
    Join Date: 2013
    Post Count: 91

    Hi all,

    Basically I want to buy investment properties and then on sell them using instalment contracts in victoria, Now I have a low income so I will be purchasing my first IP (within 4 months) in my mums name as she has a high income but I will be putting up the money.

    what entity should I use to purchase my first investment property for this type of deal? Ideally I would like to purchase more properties in the future and on sell them with instalment contracts. For my first deal because I am a low income earner should I purchase it as a individual (being in my mums name) and then could I do a joint venture with my mum which said i got 90% of the profits? so the profit would be at a lower tax bracket? (the profits will actually be going to me and not my mum) I feel like this idea cannot work.

    Also what type of asset protection come with these entities?

    So I was wanting to know which entity would be the best for my situation, And also what fees I should expect to pay for these entities.

    Cheers, Tom

    Profile photo of Hamish_QHamish_Q
    Member
    @hamish_q
    Join Date: 2014
    Post Count: 8

    Hi Tom,

    What makes you want to invest in Victoria and what goals you want out of investing in property?

    Cheers,

    H.

    Profile photo of tom123tom123
    Participant
    @tom123
    Join Date: 2013
    Post Count: 91

    Hi Hamish,

    I want to invest in Victoria because I live in Victoria and i want to make profit and experience from investing in property…

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,173

    Complex question involving several different legal issues – do you need a credit licence for example?

    Think litigation – the owner of the property and the person behind it. Is it a good idea to get your mum involved?

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

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Hamish_QHamish_Q
    Member
    @hamish_q
    Join Date: 2014
    Post Count: 8

    Hi Tom,

    Being a new investor myself, i thought along the same guidelines but after being advised that "investment properties are boxes that make you money" it opened my eyes to thinking where else could i invest to get a good return on my money and start getting a portfolio together.

    What you have up there sounds very complex and i think simplicity is the key. These forums are great for that but i'll let others post on here for you with more experience than i have but definitley dont box yourself into an area because you live there as you dont need to look at a property to ensure its growth as thats why we have Property Managers to ensure the property is being looked after.

    Good luck.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,010

    As Terry entity is second consideration and not something you can answer on the fly.

    More important question is are you licensed to do so.

    Without a Credit License there is no point in spending a small fortune on setting up a structure only to find you can't legally transact.

    Cheers

    Yours in Finance

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

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

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