Yazdan,
I agree with the previous post. You have some difficult decisions and they need to be made now. In this situation you cannot afford to be picky. You’re in dire straits and discarding the share house/border options because you have teenagers sounds like you’re still trying to look good (and protect the children’s status) even though you’re up the creek without a paddle. You also seem to be hanging on to what the “potential” is for the various properties IF you had money to put into developing them. That’s great, but from the sounds of it you seriously don’t have the money to put into anything.
If you prefer not to go bankrupt you will have to make some really hard choices and life will not be a picnic for some time. I have been down that route about 25 years ago when the after taste wasn’t so bad. What you will need to watch is something someone suggested earlier about selling something and paying the family first, then going bankrupt. If you do go bankrupt they will investigate prior financial transactions and “claw back” or “rollback” any payment’s or structures which you have put in place that look like you were trying to avoid paying your creditors who you are now including in your bankruptcy.
You do have some advantages though, not cross-collateralised and different lenders which could work in your favour. You don’t say where your PPOR is though since you have all your IP eggs in one state I’m presuming your PPOR is also in QLD.
Luckily the Moranbah property has a lender all by itself and they won’t call you in unless you stop repayments. You say you can’t afford the mortgage but the flip side is if you don’t afford the mortgage they’ll come after you and the whole deck of cards will collapse. With the tenant moving out in Sept and the possibility of no new tenant you may want to investigate your “hardship” clause with the lender and see if there’s a bit of relief there. You should get a tenant though no matter what rent. Usually it’s better to be tenanted than vacant and subject to the possibility of vandalism. (I’ve had IPs vandalised when vacant.)
You also don’t mention if the other properties are negatively geared but it sounds like they might be. I guess if they were cash-flow positive you wouldn’t have posted this thread! You need to work out what each property is costing you in cash per month. Aim to sell down the most cash costly first.
You also have to seriously consider your PPOR. About 10 years ago I found it was better cash flow to move out of my PPOR, renting it out and renting another house. I had two teenagers at the time. It also turned the PPOR into a tax deduction – but that’s a side benefit as we’re talking cash-flow here. If the rent on the PPOR covers the expenses it could be an option – if it’s going to cost you money you’re no better off. As long as the rent on your new rented place isn’t more than the mortgage on your PPOR you’re coming out in front cash-wise. This might not be what you would “like” to do but you’re between a rock and a hard place!
You’ve borrowed a lot of money and spent it. If you’re not going bankrupt you have to pay it back. It sounds like you’re not going to be able to trade your way out of it because you have no more cash or equity to “trade with”.
Knowing only what you’ve said here, I’d be selling IP1 and IP2 ASAP hopefully with some proceeds, put 1/2 on Moranbah, give the other 1/2 to the family and ask them to wait another year for the rest. This gets rid of lender 1, removes some negative gearing and hopefully helps the family feel more confident about getting their money back. Sell Daisy Hill, pay the family off and put the rest on Moranbah. This has you with Moranbah, the PPOR and no family debt. While the family debt may be “OK” I think it’s best to only owe the banks. Work out if you want to sell or rent out the PPOR and do it. Get a second and/or third job and pay Moranbah down big time. You’re basically starting again from the ground up – except you’ve got to dig yourself back up to ground level. I wish you all the best with your decisions and following through whatever plan you end up with.

Yes, it would be double dipping.  (I've already asked my accountant that question.)  I'm already getting a tax benefit by salary sacrificing *all* of my vehicle expenses, which is way better than just claiming the kms to and from rental properties.  I would have flown and hired a car over there – that would have been tax deductible – unless you needed the kms for FBT.

Hi Shelley,

Sorry to hear of your troubles. Unfortunately, it sounds like you have to go at the pace of the PM you have. I do think though that some PMs need to be held more accountable for the tenants that they do put in. And if situations arise like yours where the tenants are in default from day one then the PM should forgo their letting fee at minimum.

I manage my own (personal choice) even doing that you really can’t pick the good/bad tenants. One lot I had came with excellent references but were permanently late with the rent. They were always apologetic and had reasons. After a short period of encouraging them to move on – in the nicest possible way [exhappy], they finally left owing 4 weeks rent and leaving about 4 weeks rent’s worth of damage. I took the bond in lieu of rent and put the repairs on the tax bill.

That one’s chalked up to experience. Current tenants are lovely and prepay each week – their preference.

I hope you’re soon over your hic-ups and things get back on an even keel.

I’m an IT consultant (DBA & Apps developer). It will finance my addiction to real estate … until my portfolio becomes self supporting!

The one thing I found that worked is to deny that Mr or Mrs X lived here. If they ask for either of these people I know they’re going through the phone book.
Since I’m not a Mrs (or a Mr) and my children don’t have a surname of X they don’t know me or my children, so I don’t want to talk to them.
Had a persistent one though the other night who said she’d call back later then … and she did another 2 times … but she didn’t change her question so I didn’t change my answer!

1. Yes emailed you direct.
2. Depends what you’re using the solicitor for. Conveyancing doesn’t matter so much if it’s investment or PPOR. If it’s for other legal matters regarding IPs then it would matter.
I’ve always heard that the accountant should, but my experience has not been that good.
The accountant with investment properties gave me the most grief with getting the return right. Dispite being given a pretty detailed and explicit set of books, he missed things, spelled names wrong and had to have 3 drafts before he got it right.
Another accountant I was with was a business accountant he was efficient but it was always next year before he got the return in.
My most recent accountant has no investment property but is the most detailed and efficient one I’ve worked with. I had my return back that fast I didn’t know what to do with it! … well that’s not true …. it went toward another property.

Hi Melmac,

Having just been down that track I know exactly how you feel. Seems a bit raw that out of 7 you only get the PPOR but there’s a story to everything. I at least got the PPOR and, after an additional cash settlement to him, 1 of the 3 investment properties. Since I did *everything* related to the properties it was just a matter of doing it all in my own name. But that didn’t turn out to be as simple as what it sounded. As part of the property settlement every thing was mortgaged to 80%, and because equity wasn’t increasing as fast as it had been I couldn’t do the next one as fast as I would have liked.

It’s really so frustrating wanting to do something, chasing the finance broker with scenarios, and not being able to do it because the numbers don’t add up yet. My finance broker quit – he probably got sick of me hounding him Well no, he went to a bank, then was such a good bloke he referred me to another bank’s loans officer that could do what his bank couldn’t.

A year ago I decided tax-wise it was better off for me to move out of the PPOR and turn it into an investment property. (If you’re going to do that, don’t forget to get it valued for CGT purposes.) Finance people still look strange at you when you don’t live in one of your properties – especially if you only live up the street.

It’s now 20 months since the separation, 15 months since the property settlement and refinancing into my name, and after a small hicough because I went contracting …. I’ve finally beaten my head up against the brick wall long enough and it’s fallen down. I’ve just signed the contract for my first “post-relationship” investment property – and it’s positively geared to boot. Just have to keep the snowball rolling now!

Don’t know if there’s any good reading material about “PI after divorce” but there’s plenty of good reading material – just keep reading it. I found keeping the research up, going to property investing nights, seminars and expos was the best thing. Even if you’re not actually buying anything yet you’re hanging around people who are, and still swapping ideas and enthusiasm.

May be if you start your own “PI after divorce club” …. you can write your own book on “PI after divorce” – that would help with the serviceability

Serously though, hang in there – you can do it.