Hi Steve & forum, I have read a number of terrific authors & that has allowed me to be aware of what for me is the best route when investing. However, to take the next step there seems to be some gaps: 1) Steve, in you book (pages 267 / 268) you shift gears from 2 properties to yourself & Dave going after 26 properties, however how did you finance these? Did you use your two properties as collateral for these & each new property was then put up as collateral. I understand you were using profits from your business; however I doubt you created that much profit / cash flow that allowed you to subsidies this activity (29 properties in 90 days) 2) Did you buy the properties in your joint names (Steve & Dave) or in a business or in a trust? 3) Can anyone recommend an accountant who has experience in property? The ones I have spoken too have limited knowledge & old views in this space – so limited advise. In addition, as my wife is not at all interested in our future she is not onboard with this project as such I will have to finance all this outside of property etc. Any help that will enable me take the fist step would be terrific. Regards,Mark
Hi Mark
Welcome to the forum and I hope you enjoy your time with us.
Firstly times have changed a lot since Steve & Dave and I financed our 1st investment property and whilst the strategies remain valid the ability to borrow the sorts of lvr's that were available back then have considerably reduced.
This is not to say that it still cant be done but the journey may take a little longer for a variety of reasons.
Where are you located?
Whilst a good Accountant like any many of your team can be based anywhere i ask so that i maybe able to refer someone to you in the appropriate area.
Finally on the financing front without the support of you wife you are going to struggle even if the properties are solely in your name again for anumber of reasons:
1) You need to access an initial deposit. Normally this would be geared against your PPOR but in your case it sounds like this is not going to be possible. Alternative is to save up the deposit and costs which is not a recommended strategy.
2) Borrowing entity. No point in looking at DFT's structure with your wife being a Trustee or Beneficiary as all lenders will require her details where she is a Trustee and some where she is a beneficiary.
3) Your borrowing capacity alone will be reduced as you will still be Jointly and Severally considered liable for the entire loan on your PPOR. Their is the odd lender around who will look at your wifes income and as long as she can support a share of the PPOR debt will only consider you liable for half they will still want details.Whilst i am not trying to put you down AT ALL i think the support of the missus is going to be important in you going forward in a number of ways.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Richard,
I appreciate the input & advise – indeed it would be better to have full support, but i also understand her opinion. It may change if i can demonstrate myself.
I am based in NSW – so connection / contacts I good speak with would be a great start.
As for structure, I have read a number of times not to purchase in my own name but within a company structure / Trust – or both, the company sitting above the trust. My aim of this would be to isolate my activity from our PPOR & then levarge and Tax benefits.
Unless a vendor is willing to finance, it will be a case of saving for deposit & costs. With that said, our mortgage broacker has also not been forthcoming with "options" or not main stream lenders.
Finally, point taken about whats then & what is now – I have a long term goal and at 39 am a bit of a late starter in taking control of my future. Only through lack of awarness / exposure to such thinking.
Riachard, thank you.
Regards,
Mark.Don't forget Steve was wrapping properties, so was getting a deposit from the purchasers as well. The properties back then were around $50,000 and the deposits from the FHOG were $7,000 per property.
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
Not sure you are going to find too many lender accept a borrowed deposit from a vendor these days so unless you buy under an installment contract VF is probably out.
For an average purchase in a Pty Ltd Company / DFT you are probably need to save around 15% – 17% of the purchase price for each property so thing it might be more a long term project.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
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