- Garrett12Participant@garrett12Join Date: 2023Post Count: 0
I have a friend who has a portfolio of commercial properties throughout different states in Australia. He’s looking to retire and we’d like to structure a deal where I bring little to no money down as well as try to mitigate his taxes and the stamp duty. The properties are debt free and he’d like to get some cash out now so we’re thinking of possibly financing the properties and that will act as a cash buy out and then the remainder of the purchase price will be Vendor Financed either through an Installment Sale or a Lease Option. Capital Gains Tax and Stamp Duty and any costs in me being a US Citizen buying investment property in AUS to be paid using some of the money from the Cash Out Re-finance and then I will just add those amounts to the back end of the Vendor Financed amount. Once equity is built by loan repayment the i would as the Buyer then refinance to Buy Out the Vendor.
If Seller were to Re-finance properties, can those Loans be assumed buy the Buyer?
Can you Buy property Subject-to an existing mortgage in AUS?
Would it be better to do a Lease Option if the Loan cannot be assumed?
Instead of buying the properties, could a deal be worked out to buy the Limited Liability Company that holds ownership to the properties be a better solution for Buyer to assume the Vendor’s Re-fiannced Loans? This way the Buyer is buying the shares of the company from the Vendor not triggering any need for new financing?
Any help/advice is much appreciated.Steve McKnightKeymaster@stevemcknightJoin Date: 2001Post Count: 1,763
Any vendor finance sale will need legal advice and careful structuring to consider stamp duty (will vary by state) and income tax implications.
I haven’t seen a loan in Aus that is assumable, but they may be out there. Typically larger commercial property deals are financed by commercial paper (such as rolling commercial bills), rather than a loan like a home loan. These are unlikely to be assumable.
Buying the company will still likely trigger income tax and stamp duty implications, but again, legal advice is warranted.
If you don’t proceed, you are welcome to flick the details of the deals to me to see if it is of interest in the new fund I have established.
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
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