Hi, The advice i am asking for relates to friends combining money together to start buying investment properties,
there are 4 shares and each share puts in ‘X amount’ for deposit,(3 singles and 1 couple),
All have good incomes and would like to buy house and land packages and then rent properties out, location is Perth WA.
What is the best way to go abouts this?
Is it to Set up a company or put it in a trust or is there another way?
What conditions if any, would banks request or be hesitate about?
We would like to buy more property though the equity of 1st purchase and so on, is this feasible?
Look forward to your advice which is much appricated
Thanks ParlosHi Parlos
Three singles and a couple all buying IPs together sounds like a nightmare!
If you do proceed – seek legal advice. Someone like Terry W on this forum would be a good start.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Yes think 5 people is too many.
Maybe for a short buy/reno/flip but not for buy/hold.What happens if the couple separate or one person gets in a relationship and wants to buy a home?
Even with a trust or company people change and go in different directions.
If you simply cannot go it alone maybe just get with one other person. But you need to sit down and decide on a goal and discuss all possibilities.How long will you hold it, how will bills be paid. How will it be funded (do both have equal deposit?). The problem when you get a loan with someone else is the bank assumes you have full responsibility for the loan. This can be detrimental to building a portfolio.
Instead of buying multiple properties together, I’d look at getting one with someone else (if you can’t do it alone) and use that as a stepping stone to build your own (separate portfolio). Eg if you bought a property, did a reno to increase equity then pull money out to buy further properties in your own name. That way if your goals change you only need to decide on the fate of one property.
I agree with Jamie- Speak to Terry.
* 4 shares and each share puts in ‘X amount’ for deposit,(3 singles and 1 couple)*
This looks easy on paper. But wait till you enter a problem where one can’t repay his part for whatever reason, or 2 members wants out of the deal, etc etc. If you still want to proceed, contracts needs to be signed and every responsibility and “what-if” scenarios needs to be discussed before hand. A good lawyer is a must in this type of situation. A good legal advice at the start is your top priority.
PHP | Mortgage Station Pty Ltd
http://www.mortgagestation.com.au
Email Me | Phone MeGive us a call or send us an email for a free residex report.
My advice is don’t!
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
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