All Topics / Finance / Ist IP Where to from here?

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  • Profile photo of ellabooellaboo
    Member
    @ellaboo
    Join Date: 2004
    Post Count: 12
    May 4, 2009 - 5:38 am

    Hi all,
    Have managed to build good equity in PPOR in prime beachside location after several owner builder projects, hubby is a builder. Have a loan of 350k with equity of about 400k and on a decent income. We have a family trust set up in line with our family business and am wondering what is the best way to finance IP. Currently with ANZ wealth package with offset fac.
    Would appreciate your thoughts.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    May 5, 2009 - 4:19 am

    In an ideal world you would want to establish a LOC against the PPOR and use this to fund deposits and acquisition costs for the new IP's

    Unfortunately with Anz they wont allow LOC to be opened unless they can justify where the balance of anything over and above $25,000 is going so might have issues there.

    If you have decided to purchase theese properties in the same entity as your business (as long as you understand the risks involved here) then as long as you do not have a Corporate Trustee (Anz Breakfree wont cover applications where there is a Pty Ltd Company involved) then you should be ready to go.

    Richard Taylor | Australia's leading private lender

    Profile photo of ellabooellaboo
    Member
    @ellaboo
    Join Date: 2004
    Post Count: 12
    May 6, 2009 - 5:07 am

    thanks for info Richard. No the trust is a family trust and not PTY LTD, as far as tax deductabilty of interest is concerned I have been reading about property investment unit trusts whereby the trust purchases the PPOR drawing against the equity in the IP,s. Is this a hybrid trust which I understand that the ATO have clamped down on? Can anyone enlighten me?
    Cheers

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    May 6, 2009 - 8:30 am

    Best way to finance the new IP would be establish an investment Equity Manager Lien fo Credit with Anz secured against your current property to fund the 20% deposit and acqusition costs.

    Take out standalone investment loan with alternative lender or Anz if no CC secured against the IP.

    Yes you could consider selling the current PPOR to a Unity Trust however there is Stamp Duty payable on the Transfer and the PPOR looses it CGT exempt status immediately. Issue comes in finding a lender who will fund a deal in a HDT or UT structure.

    Richard Taylor | Australia's leading private lender

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