Hi
Can anyone give me some ideas on what to do.
We bought a property about 15mths ago. Tenants moving out soon. Our daughter and boyfriend want to move in and buy property off us as it was probably one of the last under $200000 in the area when we bought it.
Them buying it would be ideal but the property is cross collateralised with some other properties.Any ideas on how to set up the agreement as we dont think they would qualify for a loan thru the bank. She hasn’t got a full time job and he has an investment loan and a personal loan (most of his equity used up at present.
Any vendor finance would be at market rates and sale would be minimum. What happens with stamp duty etc.
Hoping for some suggestions
Debra [
]
Ps am posting same message under wraps well. Hope this is OK with allEmail me the financials and I will advise you if she can finance it normally. Please don’t wrap it until you know for sure.
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Simon
She only works casual with the prospect of some steady full time work for at least three months ? leading to full time employment (has just completed diploma in child care)
He earns $600 net /wk. IP nearly pays for itself small contribution needed (but hey it made him $63000 at least in 18mths not bad for $130000 loan)Property now worht approx $210000. Personal loan at 5.97% on $27000. And no we are not looking to actually wrap it we just want to onsell it to them with a benifit to all of us. They are living in her single bedroom downstairs at the moment.
Thanks for you reply
Debra []Not enough info.
What price will you sell the property to them at?
How much does she earn and any deposit?
Will she get the FHOG?
Being casual makes it harder.
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Simon
At the moment
No deposit.
Unsure of what her earnings will be.
This came up at a bad time we were hoping for a few more months with the tenants.
Am realy trying to see if there was any way we could arrange something now may be lease option with the chance they could purchase later once finances are more settled.
He claimed FHOG on IP(lived in it till they moved back home)
We would probably sell for between $200-$240000 depending on what valuation was. Lowest price houses around here are now $270000.
Thanks again for your time
Debra[]One idea is to look at a preferential sale whereby the discount was recognised by the lender.
Not going to be easy though.
Would need to really look into it and talk to you to see if it is possible.
Any other ideas from the other brokers?
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Debra
Would not an option be to rent it to your daughter and son in law, and to perhaps help them to purchase an investment property?
This way you can retain any tax benefits etc. of an investment, and they can have a ‘home’ but also have an investment property, and any tax benefits etc. etc.?
I looked at a property that my brother wants to rent today, and find that I tend to look as an owner rather than a renter, ie. paint the walls, put in a new kitchen, oh, no, wait,can’t do that, it’s only a rental!!
Cheers
MelThanks Mel
He already has an IP. And any extra they get goes on the Personal loan
And yes we had already thought of them renting it Current rental is $190/wk(very cheap) to their friends (the ones moving out)
Would just like to help them with out it costing us toooooo much of a loss. The only way I can see it at the moment is that they buy for roughly our original price and pay what they can. With maybe an increase in repayments when she earns more.
But this would mean that the “loan ” would actually increase Like the old government loans did a few years ago.Thanks for your suggestions. Keep them coming please
Debra []Debra
I saw that son in law (well close) had an IP, but that would not necessarily stop him having another one would it?
Another option that could work short term is that they move in, and pay the mortgage (Interest only until the Personal Loan is paid off) and all other expenses. This way you break even, and they can still have a ‘home’. You could then continue with this until your daughter has a full time permanent income, and look at her buying it off you then.
The boyfriend sounds like he has some equity in his property (80% of 210K is 168K less loan of 130K = 38K) Could even refinance (separate loan to keep accounting simple, unless personal loan was to purchase house) personal loan, although 5.97% is an awesome rate for a personal loan. Any extra the he could pull out could be set aside to help mortgage payments if necessary.
Cheers
MelThanks Mel
good idea them paying our interest free loan. It would cost them a bit more than just rent and we could probably put a cap on the final purchase price this way.
His personal loan is actually against his IP(2nd mortgage). She needed a car, which he paid for and he HAD to have a quad bike (boys and their toys) But they are paying this loan of quicker.Getting some good ideas.
Thanks
Debra[]G’day ddtaprell…
You have some good ideas already… But, if it was my daughter and boyfriend downstairs I’d be helping them out quicksmart.
What I would give serious consideration to is “what if”. “Cut a deal today” at $220-$240
make repayments/lease affordable and then how do you ensure your daughter and your family are not creating a problem for yourself down the track as far as fair eqity for all concerned in the event of a breakup. You may be gifting them $50k + in true value and making it affordable… maybe that should be your daughters share…. You are definetly guaranteed that you will always have a daughter … no guarantee that you will always have the son in law to be.I cannot think of any other way to put this to you, but it would be my first concern to protect my daughters interest.
Cheers
Bill
Bill O’Mara
Real Estate,Mortgages, Option Writing & Forex. [email protected]Thanks Bill
Had already thought of that. His aunt is a solicitor so I have told them that we need to get something drawn up to finalise details like what happens if they don’t take up lease-option(have decided that this might be the go) ie redistribution of money etc and also splitting of property if something does happen.They would be paying our interest only repayments which is approx $55/wk more than what we are getting now (yes neg geared) This would allow us to pay off our house a bit quicker.
So yes I realise that there is alot to look at and put contingency plans in place.Any other drawbacks people can see, let me know.
Debra [
]Hi. Also check carefully about ‘gifting’ the extra on top of the purchase price. I bought a property off my father – at market price – and we received a letter from the tax department asking us to prove that the property had been sold at the genuine price and that if not, we would be liable to pay tax. Cant remember all the details now as the solicitor handled it, but they were very quick to send it to us!
Cheers. Sunshine
Hi sunshine.
We’ve been thru this when we purchased a share in a property that my parents owned. We had to get a valuation and that is what we had to pay the stampduty on. We have explained this to the young-uns
Debra[]
]
You must be logged in to reply to this topic. If you don't have an account, you can register here.
