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I concur with Tysonboss1. What is your strategy for this property?
You make your profit when you buy, not when you sell. Begin with the end in mind. Who will buy this property from you when you are done with it (exit strategy). Answering this should point you toward which type to buy.
Carefull investing with family. Make sure you have a formal Joint Venture contract in place. It should cover;
– What happens if one of you wants out in a year?
– Who is going to manage the property?
– How much is each putting in?
– How will you distribute profits?
– What if one of you dies?Treat it like a business agreement
My Thoughts: To sue for damages you will need to prove how this agent's actions lead directly to you losing money and how much.
My experience: Going through the legal system will use up a lot of energy (likely more than it is worth). You have to decide if the emotional cost is worth it. Or, would you be better off using it as a learning experience, and moving on to the next deal.
I would however report the agent to what ever board or society they belong to.
Here is what you could consider in Canada.
1) Set up a re-advanceable mortgage on your primary residence – a secured line of credit on your home which increases with 1 dollar with every 1 dollar you pay down on your mortgage.
2) Take all of the revenue from the two rental properties and apply 100% to your home mortgage. (since you are already paying the interest on your mortgage, the additional payments of $500 per week will go straight to principle)
3) Use the line of credit to pay your costs on the rental properties. (since this is now borrowed money for investing, it is tax deductable)
4) Don't sell a revenue producing asset.I don't know the tax laws in Australia but this strategy will put a couple thousand into your pocket every year here.
Why?
By using this strategy, you are able to convert personal residence debt into a tax deduction (this is called "The Smith Manoeuvre" in Canada).
