Hi Everyone,
I'm rather new to the forum and found it to have great people and information.
I am currently looking at forming a JV deal with a friend. However, not sure on how I can finance this deal or structure it so I can achieve what i want. Has anyone done this before or anyone that can point me to the right direction? Please Help. Situation is as such:I am planning to do a 50/50 JV purchase with a good friend.
As the banks have told me that i have insufficient serviceability now, they will not approve my loan.
I am trying not to resort to low doc or no doc loans at this stage as we have alternative methods of finance.My friend has got only his primary resident loan and plenty of income.
He will have no serviceability problem.I would like my JV partner to take up the debt and act as a debt partner. However, as I would be contributing the deposit, expense and repayments 50/50, i would like to have some legal control over the asset.
I have made some finance inquiries and was told that if it's under a joint title, then the debt would have to be under both names – no other option. Even under a trust, if i'm listed as a principle beneficiary, i would have to be a guarantor.
Anyway one have any ideas on how to get around this challenge? Or would anyone know of any legal arrangement that i can enter to make this work?
Your advise is really much appreciated.
Cheers,
Mike
VictoriaHi Mike,
If you are both on the title and both guarantor's then servicing for both of you can be used. Are you sure that you can't service taking both your's and your friend's situations into account? Why is it that you don't want to be a guarantor for the loan? Also, why is it you are wanting to avoid low doc's? If you have at least a 20% deposit you would be able to get a low doc at a pretty good pricing and this may be the solution to your problem.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044Mortgageman wrote:Hi Mike,If you are both on the title and both guarantor's then servicing for both of you can be used. Are you sure that you can't service taking both your's and your friend's situations into account? Why is it that you don't want to be a guarantor for the loan? Also, why is it you are wanting to avoid low doc's? If you have at least a 20% deposit you would be able to get a low doc at a pretty good pricing and this may be the solution to your problem.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044Hi Cameron,
The reason as to why i do not want to appear in the banks book is so that it does not affect my serviceability and any future loans that i may seek. This is the reason why i was seeking a J-V in the 1st place. My J-V partner would act as a debt partner.
But just a matter of interest and to further explore your suggestion, what would be a typical interest rate for lo-doc loans assuming that we put in a 20% deposit? The loan would need to support Trust Structure with a corporate trustee and directors as the guarantors.
Cheers,
Mike.I see, but unfortunately there is no way to get around guaranteeing a loan for a property you own short of relinquishing ownership or at least total control of the trust to your partner.
For low docs, the interest rate will depend on a few factors, including how long you've held an ABN. If you don't currently hold an ABN you would be looking in the high 7's, if you've had your ABN for two years you could get as low as 7.29. Trust structure is ok.
Kind Regards,
Cameron Perry
Director
Perry Financial Strategies
Level 13, 30 Collins St
Melbourne VIC 3000
Ph (03) 9662 1999
Fax (03) 9662 2044
http://www.perryfinance.comThere are many lenders out there that do not require a guarantee from the beneficiaries – just the trustees. That way you can still retain some ownership without going on the loan. And you should be able to get future distributions of income.
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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