Hi Sebestian,
I agree with the previous post. Find your self a mortgage broker and they will sort it out for you. Having said that not all chef’s are the same nor are real estate agents nor are lawyers and especially nor are finance brokers. Do the hard yards now get them in talk to them and find out which ones understand your needs and requirements and then develop your relationship with them. I strongly suggest however that you define and understand what you want upfront so that you can instruct them, a bit like instructing a lawyer to act on your behalf, because they will all say yes to your business but wont always be able to deliver because at the end of the day, they don’t have the final say the lender does. It’s important to get it right the first time and everytime and because the finance industry has grown so quickly there are so many new players and so many who are new to the game. I’m speaking from experience because I interviewed and spoke and dealt with no less than 8 until I found the right one for me. It’s not easy finding good people in any field it takes time and patience but when you finally do it all becomes worth it, but more importantly once you have found that person or company or bank you wont have to worry about financing issues any more. One last piece of advise, learn and understand how financing works the frame work and the guidelines they use with that knowledge you are able to then structure your deals so your personal situation to fall with in them and once youve done that your home and hose.
Happy Investing
regards
John

Hi tig,

Becareful, some basic fundamentals for consideration when making your decision where to invest. Remember Broken Hill was a mining town that is now slowly dying. It is extremely risky investing in towns where there is only one source of employment in this case its the Roxby Down mine which is in the middle of no where, what happens if the mine closes the town ceases to exist, not that I’m suggesting that it will close in the near future. A good rule of thumb to stick to is dont invest in towns that have less than 15,000 population and or rely on one industry alone for its employment, and leverage of the companies who are experts in determining current and future demographics such as McDonalds, KFC and shopping centre developers as they have done extensive due dilligence before they invest their money in areas.
Hope this helps
Regards
Johnd

Hi ChinaBear,

You definatley need some help with this one. Lets see here we go.
1. You are never too old to take out a loan, finaciers can not discriminate against age, servicability and the deposit are and should be the only issues in securing finance.
2. If they gift you the money then you are buying the property not them then you (you meaning you and or your wife) will be on the mortgage not them.

OK Heres a possible solution to your dilema.

Treat the potential property as a joint venture, where you are the debt patner and your inlaws are the equity partner.

Have a joint venture partner agreement drawn up to that effect to protect all parties. Or set up a family trust structure. You need to talk to an accountant.

Ok you purchase property for $200K all up including closing costs
You finance property on 50% LVR ie borrow $100K which would make you each 50% owners in the property. ie you have contibuted $100K (all be it borrowed)as have your inlaws total invest $200K Upto here its easy.
Now forget that they are your inlaws, if you were to rent the property on the open market asuming a conservative rental return of $200 per week you would each share in this rent revenue ie $100 each, and you would both share in all expenses and outgoings of the property. From your $100 it would be your responsibilty to service the debt.
Now it becomes complicated because the inlaws will move in. Using the above example and treating the property in its own right technically the inlaws should pay you $200 rent with a $100 rebate because they are 50% owners which means that they still should be charged 50% of the rent. And the same would apply visa versa if you moved in you should be charged 50% of the rent. This way it is treated as an investment property and you can claim your expenses in cluding interest.

The up shot is that you both share in the equity growth of the property. Lets say in 5 years the property has grown by 50% (which should be a conservative estimate) to a value of $300K and then it was sold, you would each recieve basically $50K profit from the sale. Your inlaws have paid in the same period $25,000 in rent ie $5,000 pa but they have still made a $25K profit so they have technically lived for free because unless you are to structure a deal that they can achieve this they will make nothing other than approx 5% Interest on their existing $100K, and still be paying rent where they are.

This is a simplistic explanation to get the idea across of a way to do the deal.

I hope this helps
regards
JohnD

Hi Robert,
Different finaciers have different products with varying Interest rates, I suggest you find your self a finance broker who will work for you and find you the best deal from a lender who can be located in where in the country.
Having said that there are more factors to consider than just the Interest rates, ie set up costs, application fees, break out costs. valuation costs etc etc etc Finding the right loan can be a very daunting task, what I have done is found a broker that works for a brokering company that has none of its own products. He finds me the best deal that is available in the market that best suits my requirements at the time and this stratergy has worked extremely well for me.
regards
JohnD

Hi fastainvesta,

I’ll try to clarify.
Couple purchase one IP for $400K
eg One partner earns $100k they may be able to borrow say $400K for IP based on serviceablity and the other partner also earns $100K they too can borrow say $400K for IP as individuals therefore collectively they could borrow $800k ie purchase 2 x IP at $400K each but if they are both on the title of the original IP then they can only purchase one. Seperatley they can purchase two, but collectively they can only purchase one. I hope this clarifies my point.
regards
JohnD

Hi Katsu88,
Here are some points to consider.
If you purchase a property in joint names, then the bank views the debt as jointly and severally liable. What this means is that if you borrow $200K then the banks treats it as both of you have borrowed $200K each totalling $400K which will severely impact your future borrowing capacity.

One potential strategy is to buy in one name and only one person borrows the money. Which person for tax benefits ask your accountant.

To overcome the trust issue execute a joint venture agreement to protect all parties involved.

Don’t worry about making the bank happy, just make sure your happy. The banks aren’t happy unless they tie you up lock stock and barrel. Don’t allow them to cross collateralise your properties. Get a good finance broker to structure your finance which will benefit you not the bank.

There is no way of getting out of paying stamp duty when you change ownership.

Your other options are to look at a family trust structure where you can achieve all of the above benefits and not impact on your or your partners borrowing capacity at all.

Hope this helps
Regards
JohnD

Hi Keesha,
I like you are interested in acquiring +ve cashflow properties, however its not always as simple as that. Nowa days you need to be astute and think outside the square to achieve this result if like me you dont particularily want to be purchasing out in the sticks, not that it’s bad. Some of the tactics and startergies I have used to achieve positive cashflow is by
1. Purchasing wholesale (Below retail for what ever reason, hard to do in todays market)
2. Adding value ie Purchase $200K rent $250pw spend $40K new value $300K rent based on new value eg $350pw
3. Include extra benefits ie Electrical pack consisting of TV, Microwave, Fridge, DVD surround system, Washing Machine, Dryer total value $5K approx but negotiate $50pw extra in rent and the renter after 2 years gets to keep the goods.
4. Share the equity growth with the renter, ie cash back at the end of a pre dettermined rental period like 5 years in return for a higher rent.
5. Wrap the property information on this site inrelation to wraps
6. Option Contract to sell to renter
Use a combination of any or all of these stratergies to achieve +ve cash flow. Its hard to find properties that are positive cashflow but you can turn a -ve geared property into +ve gearded just think outside the square.
I hope this helps.
regards
JohnD

Hi nghia76,
Rest assured not illegal at all. Your only issue is tax, what you can deduct inrelation to your new transaction and your existing transaction. Check with your accountant how it should be structured to ensure maximised tax benefit.
regards
John

Hi Violeta,
I like you attended the seminar and heard Stuart speak, as a result I purchased his – The Guerrilla Adds Pack – which includes 2 telephone confrence calls with Stuart. His approach and startergies have enlitened me beyond comprehension. I have used his techniques and stratergies on four seperate deals over the last month and a half or so with unbelievable results, results that I never thought were possible. I havent used my two phone calls yet because I’m saving them for a rainy day but like you I have found his wisdom and input extremely helpful and I havent even spoken to him one on one yet other than at the seminar. You are very fortunate too have some one so talented in this field on your side so much so that I cant wait to see him at work one day. Stuart thank you for your input you cant put a price on it.
regards
John

Hi Kym

Answers in my Humble opinion

1. Negative gearing is a bad idea, it basically means you are losing money on the property and writing those losses of against your tax, why anyone would purposely go into a deal to lose money is beyond me, having said that you may be negatively gearing a property where the capital gain out weighs the losses and your own personal tax circumstances would benefit from such an investment. If you are in a position to negative gear then your definately in a position to positive gear. To make money in property doesnt mean youneed to own it ie have it paid of, you just need to control it, the more property you can control, the more money you can make. If you acquire properties that are +ve geared you can continue buying, if they are -ve geared then your servicablity issue kicks in which you can buy less a lot less.

2. Is finding gold a hard slog, is fishing a hard slog, if you dont know where to look or where to fish then yes, how ever if you educate yourself and learn what to look for and where to look then no, but you have to learn. If you can be creative in the way that you invest, ie wraps or option contracts, youll find info on both of these stratergies on this site, then you ensure you achieve +ve cash property.

3. Add up all direct and indirect expenses to hold and maintain the property for a 12 month period, divide it by 52 this will give you your total holding costs. Determine your potential vacancy rate per year by reaserching the area, ie 3 weeks per annum, then multipy your expected weekly rental by 49 weeks, then divide it by 52, and if your adjusted weekly is higher than your calculated holding cost then you have a positely geared property.

Hope this helps
regards
John