Forum Replies Created
A wrap is where you basically offer finance (loan) on a house, while with a LO, a proportion of the rent is set aside for either a deposit or pay off a loan. As you noted though, in reality there isn’t that much that is different (on how they ooperate day to day).
I guess you use within different situations. If someone is on rent assis. with the Gov, you cannot sell them a property (as they will stop getting ret assis.) so we structure a LO for them, also people use LO in Sth Aust, because only theGov. is allowed to wrap in that state. For everyone else we do a normal wrap.
Rgds.
Lucifer_auI would second RussH. I would highly recommend all people buy the book.
As a stop gap you can get some more info on getting out of debt here: http://www.johnburley.com/free_downloads.html
(you have to sign up, but they have never sent me any spam or even an email…).Rgds.
Lucifer_auTasmania is an area that really heavily relies on mining and logging…. and so the market can be very boom and bust… Mines go through big cycles (so when it’s good, it’s good, but when it’s bad, it can be real bad…), and at the moment were on an large upturn, though apart from China the market is quite weak.
“Queenstown has great yeilds” – well they don’t call it the wild west for nothing… The good, the very bad and the very, very ugly…
Rgds.
Lucifer_auI think 5% is ideal… But in the end it comes down to your comfort level.
Rgds.
Lucifer_auHow about just filling it in, compact the dirt and throw on a Gazebo on top (please note, I don’t think there are any regulations regarding filling in pools, but there could be…).
Rgds.
Lucifer_auGo through a mortgage broker. Don’t go through a bank.
If you want to see your borrowing power go here: http://moneymanager.smh.com.au/tools/calculators/borrowingpower.html
My only concern is you being able to servie the debt, as it’s not going to wipe that much off your tax…
Rgds.
Lucifer_auSo you could be indeafinantly be paying of the $80,000?
Yes. It what many people do, I plan to do it forever…
Rgds.
Lucifer_auDoes your friend need all the upfront money when he sells the house??? Why does he need the money. If he dosen’t need it that urgently offer to buy it from him but he leaves in the deposit for 1 yr (you pay intereest on it, just like a bank, revalue props. and give him back his deposit). There are lots of other creative things you can do, check out http://propertyinvesting.com/strategies/creativefinancing.html
Rgds.
Lucifer_auBanks look at a lot of figures to come up on how much they will lend on, this includes rental on the place you are buying, income level, no. of dependants, other debt (credit cards really reduce the amount you can borrow), etc. Banks look at equity in property as roughly the equivilant to cash though, so while you dather might have a ‘low’ income (actually it’s quite high, over the average), your parents have alot of ‘cash’.
Your parents could borrow $400K, with 5% deposit, or they could use the equity in their PPOR to put down 20% deposits on IPs and get no docs IP loans (you could buy 9 IPs valued at $100K, with providing very little financials).
Or you could, as I suggested before, 105% loans, though they demand financials. Also servicability becomes more of a factor. Check how m8uch you can borrow: http://moneymanager.smh.com.au/tools/calculators/borrowingpower.html
It is best to get a mortgage broker though (rather than doing it yourself), since they are the experts. Check out the Finance section of this forum. TerryW is good, but there is also others, that might fit your parents criteria.
CF+ properties are basically in rurual NSW (so 4hrs. away from Syd), but because of the new land tax, I would seriously consider doing your investing in another state or NZ.
Rgds.
Lucifer_auYou need a hybrid trust, which contains shares, which allow you to carry forward tax losses to other income, outside the trust.
A hybrid trust is like a family trust witht the benefits of a unit trust.
‘Trust Magic’ explains it all.
Rgds.
Lucifer_auWith a trust and a company, never more than 30%, but usually under 10%, CGT at 15%.
Rgds.
Lucifer_auIt depends on what style you want. I know TerryW (from his posts) can be quite agressive at getting loans (from the banks (not from you), and also his knowledge on wraps and legal structures is excellent.
His number is 1300 1300 14. His office is in North Sydney.
Rgds.
Lucifer_auThe financier offsets his risk onto the Mgt Insurer, so in the end it’s the Mgt insurer who has to pay out the financier if you default.
Rgds.
Lucifer_auThere is some hope! I have recently calimed some expenses from 3yrs. ago (just found a whole lot of reciepts, over $2,000 – AAGGHH!!!), and we will be claiming them for this yr (got the okay from my accountant). Of course the ATO can deny them but I pretty confident.
But do get a good accountanct to see how much you can claim back, and if you can only claim one or two years, I guess consider it a learning experience… Get advice from the horses mouth (not the jokey!).
Rgds.
Lucifer_au“Lets buy in Canada Luc!”
I’m with you (or NZ – it’s closer and we don’t have to walk as far [
]).Rgds.
Lucifer_auYou could always offer them something if they pay on time or before the rent is due (free movie hire, etc), rather than just getting the stick out and trying to beat them with it (I know it feels good sometimes!). Or put in your next rental agreement that any monies payed late will attract interest. See a solicitor about this before hand though (you don’t want it to be seen that you are doing anything illegal).
Or send him a letter saying that the rent has been 4 weeks late now 3 times, next time it becomes this late you will have to remove him from the property for non-performance.
Just a few thoughts… Get some more (and a legal opinon at least) before doing anything.
Rgds.
Lucifer_auIf you want to raise (from memory) over $2 million (or have 20+ investors) you have to provide a prospectus, and abide by ASIC’s laws (so you turn your deal into a private placements, selling shares, etc). Also you cannot ‘advertise’ the deal.
I must say if you want to attract investors you must offer them a very high return (over 50%+). Mainly it is for developers who simply need some funds to tie a project over for a short period of time. The problem is with security – most of the time you come after the 1st mortgage and if a deal goes belly up you can lose everything (so in this case higer reward, does tend to collorate with higher risk).
Unless you have bought lots of properties or know how to develop, I wouldn’t try to raise funds, as mainly investors look at your track record, and if you don’t have one, how can they trust you that you won’t go bankrupt.
Rgds.
Lucifer_auI think it’s important to try and figure out the motivations of governments tax policy. For example – why do governments always prepared to lessen PAYE/Personal Income tax rates rather than ANY other tax rate?? Bracket creep – so they hit you with the new tax (CGT, GST, etc) reduce your PAYE tax and everyone thinks – “fantastic!”, untill 3 yrs. latter your income has risen, but so has your income tax rate (e.g. say from 30%->38%) and your paying more tax (along with the ‘new’ tax that was introduced 3 years ago). The old saying – ‘you work from January to June for the government’, should start to read ‘you work from January to August for the government’.
There are so many taxes takeing up such a large % of our income – GST, CGT, PAYE, Company tax, land tax, payroll, stamp duty, rego of anything, council rates and surcharges… No wonder Robert Kiyosaki (author of Rich Dad, Poor Dad) says about Australia “I love your country and want to live here, but your tax laws are soooo bad!!!”. I am starting to believe him…
And isn’t this typical – “the least honourable aspects of Australian economic activity” – What? were talking about the top execs super sized incomes aren’t we??? Well no, where talking about people like you and me who save (rather than pissing it aginst a wall, by spending it like a druken salior) and want to invest to better our future, and heres a politican telling us it’s the least honourable aspect of Australias economy! Well Latham you tell me what were ment to do??? Super isn’t going to save us – I promise you that. In fact if you are relying on Super like the vast majority – your dead in the water.
The author of the Ralph Report says that cutting of CGT was for investment in “particularly in innovative, high-growth companies”, well we tried this and failed (read: tech boom). And I know which I would rather invest in… A house that provded me with an income for life or a tech company that was backed by Rodney Adler and run by Jodiee Rich.
The only laws I would change would be lessen negative gearing (i.e. reduce the tax benefits somewhat), mainly to make property avalible to first home buyers (Fed. Gov.). O’h and of course reduce stamp and land duty/taxes to levels which wouldn’t impeed on property investors.
It seems like the State Gov. (and to a smaller extent Federal – hay at least their changes have been more equalising) want to gouge anyone who looks to make a dollar so they can pump more money into failing systems (in NSW – the health system, public transport systme and degrading and overstreched infrastructure). Instead we see more ineffinceies, weve got something like 20 top level public servants, some who haven’t worked since 99′ on $100K a year, and who do nothing fpor us. Absolutely nothing. And all the state gov. can say is redundancies are our last resort…. What they’ve got jobs for them??? Well it’s only taken 5 years….
As soon as it is possible I am out of Australia and going to invest in another country that wants investment, not one that say it wants it, and then trys to stick it to us.
Rgds.
Lucifer_auIt isn’ too late at all. They have massive equity built into their proeprty, and I think there would be a couple of banks that would probably lend them 105% of a property’s price (Commonwealth – but go through a mortgage broker, preferable one on this forum). You father could borrow approx. $400K.
Rgds.
Lucifer_au“The changes to the NSW WorkCover scheme in 2001 are estimated to have reduced the deficit by $1.8 billion, more than 90 per cent of it from legal costs.”
So how did they do that??? O’h thats right, make it harder to and recieve less compenation if you recieve an injury. Wow go Austrlain Labor Party (still representing the workers, ha???).
Good on Victoria. The NSW State Gov. has had more $$$ (Billions of $ that is) than it knows what to do with, yet it still hasn’t fixed health, public transport, over development, stretched to the limit services…
Good call SuperTed….
Rgds.
Lucifer_au
]).
