Inna, why don’t you, develop, draw equity, rent out for CF+, develop new one, draw down equity, rent out for CF+ etc.

This way you have income, and some growth in equity.

Kids are taxed too highly, but you can still give them (I think) $700 ish each year. You can also have a company as a beneficiary, and pay only 30% tax. yes, you’ll pay your marginal rate when you pay it out, but perhaps that company could pay some of your expenses etc.?

I’m also fairly sure that Question 1 is the ‘profit’ between sale price and cost price.

Cheers
Mel

Hi Diane

On a 80% of value, the bank should lend you $72K. Oops, just noticed I said $82K in my first post.

So the $12K would be what you could get from them, less costs of course. It may be enough to purchase a property worth about $50-60K, but you might need to put in some of your own money if you want an 80% lend on a higher valued property.

It’s certainly a good start though, and LMI might be the way to go if you wish to buy another.

Cheers
Mel

I would say that it is a ‘capital’ cost, and therefore only deductible from the sale price when you sell – and seeing as no property was bought, I still think the answer would be no. Along the same lines as a trip to purchase an IP is not claimable – unless it is your ‘business’ – and have fun convincing the ATO of that!

Cheers
Mel

John, it depends on what sort of trust.

Family/Discretionary trusts cannot distribute losses. HDTs can if they have issued units, but not if they are acting as discretionaries.

Unit trusts can distribute losses, although I think technically you borrow the money to buy the units – or some such. Check that out with your accountant.

Cheers
Mel

1. Absolutely you will need to count the interest on ALL borrowings.

2. Steve and Dave did a lot of Wraps, and so got deposits from their buyers, which helped to fund further purchases.

Cheers
Mel

Ken, a lot of what you two are discussing is personal preference.

From a pure $$ point of view, I think you can probably rent a house for less than it would cost to buy that same house in Sydney.

If you did go down this path, then the money you have could definitely start your positively geared portfolio, which hopefully would go some way towards the cashflow ‘crisis’ when a bub comes along.

As for having no time to find the deals yourself, there are at least three people on these boards who provide a ‘spotters’ service which you could use to find the properties for you.

Best find out if your wife wants a PPOR emotionally, or if it is the financial reasons she has stated. If it’s the emotional thing, it’s going to be tougher to convince her that it’s not necessarily the best financial way.

Cheers
Mel

No probs Chan$.[] We only signed up on the interest free deal – paying monthly. We couldn’t have afforded it all up front either. However, we justified it to ourself by saying if we learnt enough to do one good deal, we would have more than paid for the course. We did a couple of good deals, and one not so good, but we still came out well in front.

Cheers
Mel

Celivia, I don’t know. I would think not, but the best person to ask is an accountant or the tax office. Friends will only have opinions, as I have []

Cheers
Mel

SIS, you come back and say that you don’t care about the asset protection after you have been sued!!

Public Liability should/will only cover you if someone is injured on your property. There are many other reasons soemone could sue you. You could be in a car accident, etc. etc. etc. ad infinitum. If we become more like America, there will be a lot of ‘nuisance’ cases, that will cost you a lot to defend.

If your assets are protected, the other persons solicitor may not be in such a hurry to come after you.

Cheers
Mel