- amelie1313Participant@amelie1313Join Date: 2011Post Count: 4
just looking for advice.
i own two buildings under a company – owned by myself and one other.
I would like to Buy him out. I don’t want to do the conventional way, as there is a loan attached to the buildings (positively geared) but rather work out if we were to sell the buildings what net amount they would get ( not sure of capital gains etc) I’m hesitant the bank may not support that I take over the loan by myself, even though the properties are worth double the loan.
Im looking for a creative way that I can do this legally without paying out the loan, but somehow putting it into my name.
maybe changing over to a trust company ?JaxonParticipant@jaxonaJoin Date: 2014Post Count: 284
So both buildings are owned by the company?
and you both gave personal guarantees for the properties?
Would it not be as simple as getting a valuation, paying your partner out of the ownership he has in the company then you have sole ownership & have not had to restructure nor incur any major fees in the process?
Not a recommendation at all, just trying to work out between the vague information.
If it was this simple it would just be structuring the equity/cash he has and paying him out, buying his shares & potentially that would solve it?BennyModerator@bennyJoin Date: 2002Post Count: 1,416
Sounds like you may have a DSR concern rather than an Equity one. i.e. that the Bank may not let you take on double the loan so you can pay out the other partner. I’d think the way to find if there is any chance is to speak with a reputable Mortgage Broker.
There are several who post on here (their signatures tell their tale), or you might want to talk with Steve’s own recommended broker – follow the bouncing ball to talk with Chris Berry about your situation >>> http://www.PropertyInvestingFinance.com
BennyChristopher BerryParticipant@chrisberryJoin Date: 2018Post Count: 1
Without seeing the structure of the setup and confirming if the company that owns the properties is trading, it is a bit hard to give you some exact advice on your situation.
If you have the income to support the lending on your own including any income received outside of this company as well as the rental income received from the properties, it would be as simple as the other person being removed as a director/beneficiary from the company and transferring everything into sole ownership in your name, including the outstanding lending. If this doesn’t service, then you may have no other choice but to sell. Everything these days, no matter how much equity or how good things look on paper is done based on incoming vs outgoing. If you cant afford it, then you cant afford it.
Transferring things from a company name to a trust name would most likely be classified as a purchase and would incur full stamp duty also. I don’t think this is really a beneficial thing to consider, but it would be better to speak with a conveyancer just to confirm.
There are other options that can be considered to eliminate the requirement of having to provide income, but these options are generally for people who are self-employed or at least hold an ABN.
If you need some further advice, I do look after all finance/lending for Property Investing and am happy to have a no-obligation chat. My email is [email protected] and my contact is 0477 212 840.
Hope this helps :)