Forum Replies Created
OK … this seems to be developing from a 'secured debt strategy' to 'no net asset' topic =
- Mortgage 100% of my PPOR (kept in my own name) to my trust … (therefore LVR = 100%=no net asset, & interest still able to be claimed)
- the trust 'borrows' the equity…
- the trust buys IP's…
- PPOR is protected against bankruptcy/being sued etc
I can (potentially) see a lot of $ being poured into more structures that may not be that watertight, using a secured debt strategy.
Am I correct in surmising this?Yes, CGT (Capital Gains Tax) is exactly what I meant. Thank you for picking that up.
I thought it only possible to access a LVR at 95% max. (although I am only able to access an LVR at 60%=LoDoc).
So, it appears that a Secured Debt Strategy is the option of choice?…so hence a Secured Debt Strategy?
I am unable to transfer back into a trust, as the GST from the last trust would be triggered and I am unable to fund this.
Thank you all for the input
"I'd suggest leaving your PPOR in your own name, and set up a Discretionary Family Trust for your investment properties. "
I have a discretionary trust, so the likelihood of being sued/bankrupt and therefore losing my house is less (using the above suggestion), compared to a Secured Debt Strategy.
Am I correct in surmising this?
Here's what my accountant has written yesterday …
"Cross collaterizing refers to putting two or more properties up as security for a "blanket loan", what the secured debt strategy seeks to do is to put an artificial debt against part of the party as a second mortgage whereby if the owner is sued the litigator cannot get the property as the bank has first security and the other has second mortgage. There is nothing left for the litigator."
I have equity in my house; I have no debt and no credit cards. I want to invest in property yet the house was previously in a trust structure (now in my name) There are implications of GST 'if' I sell (or transfer to another trust).
I don't want to lose my house and I want to invest … suggestions?
Dear Richard,
Thank you for your time and advice!!
Dear Mr Taylor,
Thank you for your reply.
I have another question that has come about from your response.
My interpretation of "…there is nothing to stop you keep the line of credit on your own PPOR total separate" is that I am able to create a property portfolio without structuring it within entities(?) by using my PPoR too? If so, how do I protect myself (ie: my PPoR) from litigation (and therefore potentially losing my house) if something occurs on a property that I am tenanting?
Is there a formula that I can obtain (or that I have overlooked in Steve's books?) that shows how I can work out the costs involved, for buying properties within entities, with nil income?
Once again, any comments are appreciated.
