Forum Replies Created
Hi Urilla,
Do you mean in building terms?
If so a provisional sum is a cost that can go up and down. Earthworks and anything that requires digging will be a provisional sum as who knows what you could find and the price can easily be blown out. However, it is possible it will come in under the amount and you will receive a credit.
A prime cost on the other hand relates to an allowance made to make a selection. For example if you have $5k to choose appliances this relates to the retail cost and doesn't include labour. So you would go out to a shop and choose what you want in this range. If the price comes in cheaper you will not generally receive a credit (check with the builder), but if you choose over you will need to pay the difference.
Hope this helps.
Kate
Yes, I didn't mean they could practice law! I have only every used a settlement agent – would you usually only engage a lawyer if needed?
Renel are you in WA? In WA the settlement agent is the person who acts like the lawyer in the eastern states…..
Yes, this is our main concern – I'm hoping someone might have done this before. The accountant said more and more banks are doing it, but I had not heard of it before so wanted to check with someone who had experience.
Thanks,
Kate
Thanks Terry,
I believe the trust is a hybrid trust and is both a unit and a discretionary trust, and it will be borrowing to buy units in the trust. Are banks happy to lend money to do this?
Our mortgage broker had told us if we borrow in a trust structure we could only borrow 70-80% of the purchase price, however we would like to borrow around 90%.
Thanks,
Kate
Thanks Terry,
We would like to have the loan in our own names so we can borrow with less deposit. Also the accountant did say by borrowing with a personal name and giving the money to the trust to buy the asset you are able to claim the interest on the loan.
Thanks,
Kate
HI Derek,
Thought I would post it up I didn't know what DOLA was!!!
Hi Guys,
I think there is some truth to this article. I know a lot of people looking for places to rent in Perth and have taken places for much more than they are worth just so they have somewhere to live. I think if they find somewhere cheaper they will break the lease to move in.
One of my friends has been looking for over a month, an agent called her to say she had made the final 2 and how much more was she willing to pay, she said an extra $50 a week. When the agent called her back she hadn't got the house as they other tenant had offered more.
I think some landlords are probably getting on the band wagon if the leases are ending and that could be a reason for people moving out as well.
Thanks,
Kate
Hey Guys,
I have Renovating fort Profit on my Facebook and she has said she will release a statement in the next couple of days. From what she said apparently the lady who did the course had not followed it properly and ACA had filmed it when it had not been finished……….
Kate
I have spoken to my broker re borrowing 80% and the vendor financing 20%. He has said for the particular bank he is looking at that they still need to see we have the money in the bank for the 20%.
If this is the case, how can this strategy work!?
Thanks,
Kate
Thanks Pat007,
I'll look for the thread now.
I have also just asked the agent whether the vendor would consider a vendor carry back option of 20%…..will see how that goes.
Kate
The property is NOT off the plan.
HI Guys,
Just bumping this one back up. I just wanted to see for the one I'm looking at has a 16.4% return (not off the plan) with 2 houses being rented for a fixed term. Would borrowing the deposit and stamp duty be ok if we plan to pay off the higher interest loan quite quickly or would it still not be such a good idea?
Thanks,
Kate
Thanks everyone for your posts. The one I’m looking at is a 16.4% return and would still be cash flow positive with a loan for stamp duty and 10% deposit with a 15% interest rate. Also taking into account pm fees and insurance costs it would still be cash flow positive. It is in a regional area and obviously has risks however for the return I think it’s worth going after. We already have an ip in this area so we do know quite a bit about the place.
Kong-great idea, does anyone have any ideas for vendor finance or something similar?
Thanks,
Kate
Thanks for the replies. I am the same as j21 don’t have equity so would need a personal loan. Is there any kind of security required? I have seen a few loans around 15% does this sound about right?
Thanks,
Kate
Sorry I don’t know more of the technical side! We are in WA so don’t have that problem.
Once we have put it into place, I’ll update again
Thanks Terry,
I do not believe there is a set amount that the trust has an interest in, from my understanding it has an interest in the remainder of the equity no matter if it goes up. So if you have a loan of 80% then the trust has an interest in the remainding 20%, if the price was to go up so does the % the trust is interested in also goes up. I do not know the technicalities yet as we have not put this into place, but from what I understand this is the way it works.
The trust also does not need to put in any money to be a caveat on the title, if the owner gives the trust permission to put a caveat on the title it cam. Creditors can do the same if they can prove that you owe them money.
Kate
Hi Terry,
Sorry that wasn’t clear – the trust adds a caveat to the title of the property so it has an interest in the property. Therefore if someone was to see what assets you have they would see the bank would have a part and then there is another party who also has an interest. If you were to sell your house the bank would get what they are owed and the rest would have to go to the trust.
Kate
Hi Reno,
The one we signed up for was $4k – we get the trust that goes as a caveat on our titles and also a testamentary trust. We also got the legal templates (which was a bonus we didn’t know they were coming!) and we can contact Dominique about most legal questions. We are also setting up another trust with her at no extra cost. The trust that goes on the caveat is completely separate from ourselves and cannot be tied back to us (eg by transferring money to family), she has based her system on the Vestey Trust which as I believe has not been able to be broken and family are still receiving benefits now. We thought this was pretty cheap for what we were getting, to set up a trust at our accountant was quite expensive plus tax returns and if we were to transfer the properties into our name we would have to pay stamp duty.
Thanks,
Kate
