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Yeah that’s why I was saying, alot of people setup the trust, but do not put there own homes under it also, and can get caught out, but it doesn’t really matter, because you would borrow under the trust to use the equity to acquire more property. Its more for the fact that some banks look at any positive income in a percentage range income, for example if you make $1000 a week, a bank would only calculate 50% (for example) and really the banks look at $500 a week instead of $1000.
Imagine making $4000 a week and the bank only calculating 70% of that. It’s a lot of money missing, and would put a reducer on your borrowing capacity.
I can’t get through to my work email but searching on another firm, came up with this.
Asset Protection
A Trustee of a discretionary trust holds the property beneficially for the beneficiaries. Property held by a person as trustee cannot be taken by a creditor in bankruptcy, unless the debt relating to the creditor was a trust debt. Similarly, property held by a company, as trustee for a trust, cannot be taken by creditors in a liquidation of that company unless the debt is a debt of the trust. Any properties held in trust can only be attacked by creditors of that trust.When will this be effective?
A golfer is found negligent after hitting another player with a golf ball and is ordered to pay $2M in damages. The golfer owns no property in his name, but is trustee of a trust, which owns 5 investment properties with a total value of $2M. Can the creditor attack the trust assets? NO.A & B commence trading a deli at New Farm. They sign a lease for 5 years. The business goes bust and the landlord obtains judgment against them (jointly and severally) for $300K. A & B go bankrupt.
A is married to X and they have a family home and an investment property with total equity of $200K. A loses the lot and his wife has to deal with the bankruptcy trustee and has to come up with $100K. She can’t and the family home is sold.B owns nothing. The family home is owned by his wife and there is a family trust that owns 2 investment properties owned by the family trust. B keeps the family home* and the trust assets can’t be touched.
*This position may differ depending upon circumstances. We recommend that specific advice be sought on protecting the equity of your principle place of residence.Discretionary trust.
Only way creditors can leech the trust is if the trust itself has borrowed funds. Otherwise it can’t be touched even someone hurts them selves and the assets are under a trust creditors can’t access it. But not many people put there own home inside the trust because of the fear of complications of not officially owning the property in your own name and this is where creditors can get you, and I think if you go bankrupt, the trust still isn’t touched IF it’s self sustaining with the rental income.
Get advice from solicitors. And pay through the teeth for it. Because I went through 9 solicitors asking for there advice and explaining what I wanted to do and couldn’t even explain the laws back to me.
I found one that new exactly what I wanted and payed for it. I’ve still got my email on the discretionary trust structure.
Also search google on discretionary trusts and thenbsearch up the bankruptcy laws. It’s 2 different pages but both from Australian law firms.
Also, payment should goto that has the lowest tax bracket. But then later take into note on how the banks will look into the extra income from property and how they would formulate that into your income liability or savings.
In your case, with that amount of savings, I would find another investment to fund your current problem. Don’t run in circles, sit back be calm look at the numbers and see if they stack up, even if it means purchasing into shares on a blue chip company for the dividends to offset your repayments. Seems that your trying to break into the property market, but still have a bit of fear of losing, and trying to invest not to lose.
Try not to take advice off others like someone said to you to sell the property, cause that’s what they would do, look for your own advice.
Cheers hope it makes you see things a bit clearer.
I know of 1 person, that owns a fair bit of property and makes a huge return and bought some under $50,000. Your not researching or investigating hard or far enough.
Ive found properties in St. Claire and North St. Marys, that are under $170,000. And probably cheaper.
Tsk tsk, giving your money to FA’s and what you just have over them control and you hold all the liability? How about research for yourself, start the steps, it will also start the moment for your motivation.
Ask the questions, don’t be like others and don’t assume you can’t do anything with only limited amount of money.
And make sure you do calculations correctly, I know that there is always fear for hard earned money, but if the numbers stack up, then don’t let it pass you by.
P.s
I know a lot of guys do bar tending jobs at night to make up the extra cash, good tips and stuff, if you want it, you already know how to get it, it’s just doing it and having enough discipline.I don't think many people know this, but I myself arent sure which bank offers 100% calculation on rental income, but I know st.george calculates value of around 60% of rental income.
So if you a few of get at least $1000 a week rental income, if nots in a trust or just under your name, most likely the bank is only calculating $650 of it and the rest is for lifestyle expenses, this is one of the reasons people succumb to a stop in purchasing property and can't understand why the banks arent lending anymore.
Alot of questions people ask them selves about investing, and any other sort of typical chat on 'how to do it' I'm sure if its alot easier to research your own answers?
Instead of asking someone how come the banks wont lend you anymore money, find out the reason why?
Can't find any properties that are cash flow positive? Well your not looking hard enough or you can't see what the others can, or simply you think it just can't be done.My best opinion? Learn what you can, take everything in? Yes, but find out for yourself don't expect to have someone give you the answer.
Currently selling childrens book between 2-5yr old Learn how to ride bike!
Could it be wiser finding 2 very cheap investments, sitting back doing the research, making sure the numbers add up, and try to make the money to pay off your house? Have you considered that all though cheaper to live but travel distance is greater to work or such areas of recreation and would cost you more in fuel, in multiple cars? Or that other things change to where you will move to and cost more on any road tolls?
This just an example to look on when considering what your doing, a lot of people think it’s a great idea what your doing and actually think there going to save money when really there not and going broke even faster.
And make sure you know the difference in builders clay to lime.
And paint, buy a pallet of it, you can store it for a while.
Alot of people here deserve to be ripped off, not once, twice! And for double.
I've heard this cry many times before, if your cant see how to bring the costs of work down and dont make friends, then you deserve to pay the premium through the nose.
Alot of people are narrow minded, thinking that tradesmen to a professional are two totally different things, its funny how if you see some doctors or solicitors to some builders, they think were worth nothing, like others have said bout a $350 dollar an hour solicitor is worth it. But you see its the builders who get all the money, you may be a professional, but think about it, you buy a house (1 loss), you pay a builder to rebuild your house (2 losses), now they builder is probably doing another 2 or 3 houses? that means when you think your all that talking down to onsite guys or whinging on prices, by the time he finished all 3 dwellings, he buys 2 more properties outright.
we have one guy that comes in to our shop that owns out right 35+ houses. No debt there, he over priced a house to build by $250,000 (1.5m built) because he didnt want the job, and he got it. And the best part of it all, he some times picks up materials from our yard in continential bentley 4 door sedan, cement in the back no worries. So some of your dont think for a second that tradies are scum and arent worth there value. Everyone knows there money in bricks and mortar.
Your strategy should be based on who your connections are, who your related too, what your good at, this is what makes a good strategy. Not by looking at someone else how they buy all these positive geared properties and so on, they may no realtors from all around, you don’t know.
I have the most ideal strategy for me, and it’s easy to guess when my family owns a building supply.
Your strategy should also change, like the others said, depending area and people in the community, be careful when doing renos because Ive seen a few investors pay a little to much for such simple works.
Have a plan, and remember cement isn’t cheaper buy how many bags you buy, but per ton. A lot of people get confused with this. And if possible buy direct from suppliers, and make a relationship with them.
Maybe you’ll have 3 IP’s and you might find it cheaper buy ‘crunching the numbers’ to buy bulk and use the same product throughout all 3. Little things make a huge difference and also try and save products you don’t use, good off cuts, because you’ll be shocked how much you can lose at the end if your throwing things away like bags cement, bags of sand, quarter ton of sand, 1m x 1m piece of blue board. After calculating how much product you may lay to waste could be vast over 3 years.
I think a few of you out there would sit back and calculate how much product was thrown out, you mite find the number to be enough for minor cosmetics to a bath room.
My 5cents.
It’s not about being anal about it’s bout looking at your losses. I know it’s irrevellant but why do you think dominos has the rings when there making pizzas? If they didn’t? Calculate a handful of cheese lost across all there stores.
Coring into a concrete slab is a lot dearer then most people think. Beware of these drills !
It’s best when you have a IP on a pier slab. Everything is so easy.
Yeah I wish wingercaribbee council was that easy going
Correct me if I’m wrong, but I think once the kitchen and bathroom are put in, it is then declared a dwelling and probably need DA approval.
80 to 100k? You can get basic home from mastertons for that much. Keep shopping around. There is cheaper then that.
I wouldn’t pay nothing less for basic lightings and fixtures at around 65 to 85k.Check out the different buidling materials that are out there. The kit homes are also rip offs. And can be more costly in the future for constant repairs.
Yeah I would say its dangerous if your not from the town originally. Where looking into purchasing there also, and we have no problems. Some of the units have more Hi Fi then our own homes here. But like I said, you have to be from around there in the first place. Because if your not, you will fall into trouble all the time.
If I'm right, you want to be the middle man to be able to build a structure for a Property Developer? And claim also commission on the build if you sell the 'price' to buyers?
If this is right, then you need a trade or more than 5 years in building industry, and have a Cert. 4 Builders to probably concrete the position. Otherwise experience in construction can be adequate.
Hope this helped your answer.
Well, I'm not property investor smart, but I'm a fast learner. We have the assets and pay to be able to buy. But I want to do my research first, and speak who ever may be of service for investing in property specially in Sydney (though we live here, we'd invest in other states also).
My wife and I are both young (24 & 25), we both have good jobs after tax we make around 160k a year. Our house is payed off (estimate worth $900k), and we have save approximate 10k a month. So I want to get the best advice in whats hot around now. Because I've seen people lose everything on the wrong investment. Where not looking for anything in a huge price range, Probably not even over 250 if I can but good return. But thats also very difficult to find I hear these days. So here is a bit of a run down. Of our situation.
Also if anyone needs hardware, building supples or raw material. Contact me.
