Old enough to tie up your shoe laces….thats too much Jo. hehe…..
Please give us another prize quote from your endless collection…

Sal if you’re buying to hold then follow what Jan Somers says and that is it doesn’t matter when you buy, as you will pick up all the swings and roundabout over the long term.
If you are just speculating then that a different story.
So first determine (or explain) what your aim is…
Its like the people who bought the apartment for a lifestyle change.
At the interview they said they didn’t care what the value was or if it dropped, they bought it to live in and for their lifestyle requirements. They had no intention of selling so it didn’t matter to them.

Sometimes we get too caught up in this property game, and should just enjoy life a bit more instead..

KP

You s*#t stirrer Aus,
Trust you to raise this topic.

But I’m with Baloo on this one.
Its not inconceivable…no reason why they can’t rule that you quarantine the loss within the property till it shows a profit.
Then you don’t pay tax on the profit till the loss is used up.
ie.. you don’t lose the ability to claim the loss, just defer it till the property shows a positive cashflow.

This is what happens in business,,carry forward a loss into the future to offset against future profits.

There was a time where as a PAYG taxpayer running a business as a sideline you could offset the loss the business generated against your PAYG income, but the tax office abolished that one.
Lots of “loss making” small businesses closed down.
Negative gearing was abolished in the USA not too many years ago, I’m not sure what effect it had on the rental market though…

I understand you can still claim the interest paid on your PPOR mortgage in the States as a tax deduction, so as least they have that…

I reckon Marky Mark Latham would consider it….Johnny John will leave things as they are.

As Jo said…Bring it on…I think its not a bad thing to happen…

KP

Missed it by a day…
Jo, can yo call them and see if they will extend to include the Monday….then I can attend..

KP

WHOA !!!
How is your interest in the property protected if its in your partners name ??
Do you have an official jv afgreement to protect your interest, or some other documentation….

Regarding your equity position…most banks will lend to 80% of the value of your property, so if your place is worth $550k then 80% will be $440k and if the mortgage is currently $395k then the available equity that you can use is down to $45k.

You will need to go beyond 80% borrowing to tap any extra equity in your property, and then you start incurring extra costs like Mortgage Insurance, etc. plus the bank may query your servicability based on your income of $95k

I reckon you need to do more homework and get some expert legal and accounting advise

KP

Sounds like you have already contacted the council and determined that the block is suitable for subdivision, so no point contacting them again.

You may want to enquire if they will allow strata title or green title subdivision.

I have done a few of these, but not in Sydney.
The first thing I do is to get a surveyor in to survey the block.

It only costs a few hundred dollars, and the builder or archietect will require the survey map for their plans / design, anyway.

In my case the surveyor does all the applications for the subdivision, liasing with the various govt. departments and council for approval, including getting quotes for me for the water, sewer connections and the additional electricity and gas connections.
Its a painless process and as far as I am concerned, best left to the experts.

KP

I repeat my earlier comment….its dribble, misinformed, opinionated dribble, at that.

Its not a matter of agrereing or not.

It is more likely for a wrapee to default than for a wrapper to default.

Some wrapees even go back for more after selling their wrapped property for a profit, why ? because they preferred dealing with the wrapper than they do with a bank. The terms are easier and more flexible.

It is possible for a wrap loan to cost the same in terms of interest rate as would a bank loan, there is less paperwork, your credit refernce file will not reflect the vendor finance loan, this may help you borrow further without the bank telling you that you are at your borrowing limit ( unless of course you like having the bank dictate to you at what level you can no longer borrow funds)

Pelican, you don’t need to justify wraps to the uninformed, just keep building your positive cashflow business. Think on the positive side…more misinformation, less competition.

Infinite, try contacting Tony Cordato or visit his website…he is a lawyer and one of the best informed experts on vendor financing, and is located in Sydney..if your query is of a legal nature, best to conatct a legal expert.

KP

What a load of dribble…

If wrapper equates to landlord, and wrapee to tenant, then its the same as saying that a tenant should ask their landlord for proof of payment of the mortgage to ensure that the tenant is protected from being evicted if the landlord defualts, for whatever reason.

Tenant: “As proof of ownership and proof of payment, can you supply me with a copy of the title deed and monthly loan statements before I sign the lease???”

Landlord: “Yeah sure, anything else I can do for you….??”

Yeah Right !!!!!!!!!!!

A wrap is inherently positive cashflow, even if offered at the same interest rate as the underlying loan or at an interestbelow the underlying loan, so there is less likelyhood of a wrap owner going bust than there is of a negative geared, negative cashflow landlord.

If both lost their jobs, see who struggles first….
The other point is that many wrappers do this full time ( ie…they have given up their JOB) because they can.

Try doing that with a negative geared property portfolio.
It can be done but you will have to rely on tapping your expected rising equity. Would have to take nerves of steel and a very generous lender.

Most vendor financers are investing to grow a property portfolio..
Why on earth would they default either intentionally, or unintentionally and lose their investment ??

Pelican hit the nail on the head.
What is required is ethical practices and full disclosure.
In other words it need to be regulated by a recognised body.

Vendor financing has been around as long as colony Australia has….its not new, just not so widely used.

It can work equally well for an investor to be the wrapee…allows him to aquire more properety without going to the bank and begging for a loan.

Its also not restricted to lower socio economic groups.
There are yuppies out there with voracious spending habits on multi six figure incomes who are unable ( or unwilling ) to save a deposit.
Prime wrap candidates…for exxy property to boot.

Used properly, correctly, ethically, vendor financing, lease options and other such instruments are excellent vehicles for furthering a property investment portfolio, especially if used in conjunction with “buy and holds” for capital growth…

KP

Hmmmm…
Does $500 pw on a purchase cost of $290k fit the criteria ??
I don’t know, I’m not very good with maths…

KP

Hi Greg,

Boo Hoo !! still no moderator to add guidance or comments….maybe we should lobby for you to be the moderator….at least you reply to your posts…

Calvin, its a requirement in WA to get a Credit Providers Licence before you can offer vendor finance, but this does not apply in other states.

However, it is illegal to wrap or offer vendor finance in South Australia.

But there are other ways to skin a cat to get around this restriction.( sorry to any cat lovers out there!!) Greg knows what I mean….about the other ways, not the cat skinning…

KP

Whats wrong with you guys…that first property is awesome !!! Check out the chimney stack…its a classic.
And the one in Stanwell has heaps of potential…asking 68k, what would you get it for ?? closer to 50k…you can’t go wrong.

You guys are way, way too fussy ( and spoilt)

Now where the hell is Victoria ????

Seriously, if you were closer to Stanwell, the 68k property just says potential…

KP