Forum Replies Created
Motivation for selling….
Cah flow issues. That's it, if we can fix up our shortfall some how, I'd rather hold the property as it in a great location. Specifically, Southport, QLD. next to no vacancy rate, other expenses are relitively low, it's just a cashflow issue.
Thanks for the assistance.
Gav H
I can't stress the importance of educating yourself as much as you can. I took some peoples word for it when I baught my first IP in 04, didn't do too bad but could have done alot better if I had the education (still very limited) I have know.
You need a definate plan. What are you trying to achieve out of your property investment? Growth, cashflow or both. Even if you concentrated on your finances for a year or two, educated yourself and utilsed the time to research the market, you will be miles ahead. I read somewhere that investing isn't risky, being uneducated is.Another idea, if you're passionate about real-estate investing, utilise you're current position and formal education to build your own business. Something that will enable to employ people like yourself to do all the 'work' for you while you utilise your 40 hour working week to learn how to create wealth. Have a look at Rich Dad Poor Dad, then Cashflow Quadrant by Robert Kiyosaki. It will ultimately change the way you approach your most valuable asset, time.
All the best.
Gav H
When I went in Sydney I was 'sponsored' by Hans Jakkobi as I was a subscriber to his web site at the time.
At the end they gave me a feed-back form and asked me to give them numbers of how many people I know that might be interested. A few weeks later I received 10 free tickets in the mail.
I didn't know it at the time but quite alot of people around me had paid $900 for their tickets. I gave one of the tickets to my now business partner.
In short. If you paid, it's woth it. Weather you paid or not. If you enjoy it, tell them and make sure you use the feed back sheet to get some free tickets to give to family or friends.
Have a great weekend.
Gav H
Something I've been thinking about.
What if you sold a 'share'of the proprty to someone else, not a share of the title, but a 'share' in the value. Then baught it back off them at a later date (Obviously if the propert doubled, there 'share' would double). Draw up contract of course. Something along the lines of. "purchasing 1 share for the same value as ?% of the market value of property on any ven day….."
Might give you the cash injection you need or just turn it in to a cash positive invstment for you and the other 'share' holder to ease the strain short term.
Kind of like hedging.
I'd hate to you post an "if only" in12 months.
Another option. Can you borrow some cash money off someone else to tie you over. You might be surprised how willing people are to help. Have a plan to set out as to how and when you would pay them back. Even if you arrange to pay them back in ten yars with interest. If the property does what property has always done, you can sell it then, give the money back, plus interest and walk away with a tidy profit.
There's always options. Just a matter of finding one.
Congrats on the marriage.
All the best.
Gav H
I am in a similar situation. 2 IP's and have recently established a trust. If the reason you want the IP's in your trust is soley asset protection then drawing down the equity will be the cheapest and most effective way to do it.
Even if you just set up a line of credit against the equity and not use it 'til you need it. Might cost you $20 amonth but definately cheaper then selling.
The only real issue is that you wont be able to distribe any funds from the property (capital gains) if you choose to sell later or if they are cash positive and producing a significant rental income; but I'm assuming, as they are IP's, you wont be considering that any time soon.
Just make sure anything you do from now on is within the trust.
Congrats on the first two,
Gav H.
Another option would be to set up a trust only and have yourself as the trustee. It's cheaper short term to get started and will get the ball rolling. You can still disburse funds to the lowest wage earner so the tax benifits are still there if you want to sell or the property is positively geared.
All going well and as the portfolio grows, you can form your company and appoint the company as the trustee. Effectively this is the best way to 'remove' yourself from the assets. You would be the director of the company. Control everything and 'own' nothing.
I was quoted $600 for setting up the trust through an accountant; I'm sure someone out there knows how to get it set up for less.
I have two properties in my own name and have recently set up a trading trust, trustee company and trading company to conduct business through. The trust owns the business' and any future property will be purchased by the trust. The trustee company has licenced our trading company to operate under the business names and use assets within the business'.
It was slightly expensive to set up but we only have to do it once. If you're not going to conduct business then this structure isn't neccassery.
Good luck,
Gav
Scott no mates.
No.
She is already receiving an entitlement. The transfer would not increase her payment.
Thanks for the heads up.
Gav H
I went to the same thing two years ago.
I really enjoyed it. I say do it and make up your own mind.
Good luck.
Gav H
Check out http://www.tridentpress.com.au
There's a great book on there called The Tax Solution.
It has a chapter or two related to trust structures, their benifits and reasons for establishing them.
If you are not in a high risk industry where you are likely to be sued, personally is probably the best way to by IP in the beginning. You can right off loss against your income and it is a bit easier to get finance. Once your port folio builds and you build a relationship with your bank manager, you could look at establishing a trust to purchase any new properties in.
There are so many opinions on the topic and good arguments for both. I'd recomend educating yourself as much as possible before buying your first IP. After ll, it's your money.
All the best with your endevours.
Gav H
1984 Holden Panelvan. (SHGN)
Paid $5k three years ago, still worth $5k today. Shame about inflation though.
I do have a moto too. '98 Honda VFR 800. No I don't have life insurance, yes I know I should.
Looking at an E55 AMG Mercedes for the next car. I'll wait a few years to buy it as the val drops about 20% each year. Should be able to trade the panny in for one in 2020.
David.
My mother in law only needs $50k. (pay out the bank and some other small debit) and she's not in a position financiallyto borrow against the property and do renovations herself.
She wants the property to go to good use and it's not at the moment. It's un-rentable and empty. Not a good position for an asset to be in.
The mother in law would still be a beneficiary in the trust and the highest income earner would be the trustee so any loans against the property would be serviced by the trustee. (Or the director(s) of the trustee company if one was appionted). Once a tenant is in place (200p/w) the propperty would be cash positive. The intention would be to keep the property in the portfolio cash positive to maintain a high level of security against rate rises and lulls in the market. Very low risk, modest return.
As it's my inlaw, I want to keep well clear of any creditors knocking on the door. If nothing else, the property would be paid off in the same time a at the same rate once the renovations are done. If we get a tenant, a few years earlier and a small passive income to go towards the next deposit.
It's an extemely conservitive approach but one that the mother in law is happy with.
Richard.
I knew i joined this site for good reason.
Looking at setting up a new trust/company so you have just saved me quite a few hundred dollars. Thank you!!
Gav.
Mike King
You will be looking at $720.00 if you want to buy a shelf company yourself. You can do that on the net but I would recomend talking with a solicitor and or an accountant (talk to as many as you need until you find one you like) about the correct structure for you.
A solicitors professional fees to set up a company and discretionary trust vary. I paid $800 in professional fees but I'd rather pay the money and know it's done correctly.
Then you'll need get your acountant to organise a TFN and ABN. Cost of roughly $100 each.
You should have plenty of change out of $2k. Use that to buy a dirty big filing cabinet.
Just be sure you're clear about your intentions from the outset as it can be costly to transfer property from entity to entity at a later date.
Good luck.
Gav.
