Hi everyone! I’m new to this sight but think its great the way people are helping each other!
I’m at the starting stage of developing a small investment property portfolio and keen to get thoughts, or any advice from people who have been in a similar situation! Firstly a bit of an overview of my current situation:
I’m have about $230k of equity in a melb. Inner city apartment (current value approx $285k) I currently live here and intend to do so for probably the next 2-3 years. I am 29 YO and earn around 80-90k pa, so my outgoings are quite low.
My intention is to team up with a friend in a similar situation as myself and contribute around $50k in cash each (drawn back from my equity in my resid.)
We plan to use this $100k to acquire around 4-5 country prop each around the 80-100k mark. I would like to incorporate a company from day 1 to avoid any mess later, however my concern is whether banks will lend to a company with no history and set up purely for the purpose of prop investing! Will they require security on my property? Or will the invest props be enough? Or should I be looking about starting in a different way?Keen to hear people’s advice, or comments!
Cheers JayJay[
]Keep up the good posts!!!
I was told yesterday by a mortgage broker that banks will run away scared if you tell them you are a developer. Its too risky.
Hi JayJay
Your idea seems fine, except to buy propeties in a company structure you will lose the 50% CGT exemption. The rule of thumb is generally to never purchase appreciating assets in a company.
I suggest you contact your accountant. I am not one, but a trust structure would probably suit your purpose better. I’d have a read of “Wealth Guardian”, written by Steve McKnight in plain english for everyday people like ourselves. It explains the differences between each type of structure.
Good luck with your empire,
Del
Thanks Del[
]JayJay
I have just set up a company to buy property as a trustee for my family trust.
This is the advice my accountant has told me.
Hope he is right!“I’m no tax expert just know a good buy when I see it”
Hope that helps
cheersHi JayJay
Yes banks will lend to a new company with no history set up just for property investment. In fact most banks will only lend to non trading companies (ie setup purely for investments) because of the risk involved.
But I agree with Windel, you shouldn’t buy property in a company. Use a trust instead-with a corporate trustee.
If you are both directors or trustees, then you will have to guarrantee the loan. It is really just the same proceedure as getting a loan in your own name. You will ahve to prove your own personal incomes etc and provide a copy of the trust deed.
Terryw
[email protected]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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