Forum Replies Created
Thanks Paul!
I had heard that someone called Thad was who I had to speak with but had no idea who he was! There can’t be too many Thads around – so I’m sure this is what I’m looking for.
Thanks for that – you’ve saved me a lot of messing around trying to find him.
Greg
Thanks everyone!
Thanks for that.
Oldtimer – how do brokers typically get paid in this situation? A flat fee?
How is this type of networking done legally then? How do you get the necessary authorisation?
Hi Groova
If I were you, I’d start by determining exactly what strategy I want to focus on: buy and holds; wraps; renovations etc.
Also, the API magazine has rental yields (although not every month and not for every state!!). If you’re going to focus on +ve CF properties, then yields will be more important that CG.
Pretty certain you wouldn’t get this info for free – maybe try the Residex Reports or something similar.
Hey Pat
I’m in exactly your position – just finished uni and about to start work in March. I thought about working in the property division a lot and spoke with a fair few people around the firm where I am going to be working about it.
I’ve previously worked in the property division of a firm for a couple of weeks (vac work) and didn’t find it that great. On top of this, depending on what type of firm you’ll be working for, most of the work won’t be relevant for your investing situation. Usually, you’ll be working on larger deals where you’ll be assigned a very specific task that won’t be relevant at all.
I asked one of the blokes I work with, who has been working in the property division for 2 years now, whether it had helped him with his personal property dealings and he said that it hadn’t at all – although he did say that he could at least identify all the relevant docs – but that’s not hard.
Again, all this depends on what type of firm you work for, but I certainly wouldn’t sacrifice working in the division you’ll most enjoy for the chance that working in property law may help a bit with your investing.
I agree with the comments above, get someone else to do the legal work for you.
Hi Wendy
I don’t think that the ATO would look upon that too kindly. Can’t say for sure…BUT, didn’t they recently crack down on that type of strategy with split-loans?? I.e. Paying off all of your home loan debt first, and then paying off all of your investment debt later. What you are proposing seems fairly analagous to that.
There are 3 ways that Steve recommends in his Wrap Kit to calculate how much principal is owing and how much interest has been paid etc:
– An Excel spreadsheet that you programme yourself to do the numbers
– Home Loan Analyser (Deluxe) which is a software programme that costs about $100
– Wrap Around Mortgage Manager (WAMM) which is also a software programme that costs about $500.Hey skm
I’m in a similar position: young, very little cash, no job (although I’ll be starting full time in March) etc.
I’ve been a bit of a procrastinator for the last couple of years: I’ve read heaps of books and done a lot of research, BUT, at the end of it, I’ve got nothing tangible to show for it.
I just went to Steve’s Masterclass which set me back a fair bit of cash – BUT has definitely given me more information, a few contacts, and the realisation that having cash is not a crippling requirement.
Sure, it helps, but it is not a necessity. Although I haven’t run this by my old man yet – I’m planning on making an investment proposal to him in the next couple of weeks. I’ve bought the Wrap Kit and have been working hard learning all I can about it. I’m going to try and use dad’s money to buy a property to wrap for him before I start work in March. If all goes well, hopefully more than 1. I don’t care that I’ll get none of the profits, BUT it will be a good learning experience. If Dad’s not too keen – there were a few people who were lacking time but had plenty of cash at the Masterclass that showed some interest and who I may approach if needed.
You are really young and have plenty of time. Don’t let having no money stop you – try to think of ways that you can continue to learn and get experience.
Hey jcls79
I’m very much a beginner with “wrapping” – I’ve just finished going through the wrap kit and haven’t yet done a deal.
My understanding is that:
– you cannot wrap the property before you have settled on the property initially – that is, until you are the legal owner.
– once you are the legal owner, you have to include the wrap terms in the contract of sale. This will be before the second settlement which will occur when the client makes their last payment.Hi ivanaw
It seems that your main issue is how you can recoup the money you’ve spent on the renovations.
From what I can gather, there are two possible scenarios: you will be treated as being in the business of property development/renovation; or you will not be treated as a business.
If you were found to be in the business of property renovation/development, then my understanding is that all of your expenses will be deductible as business expenses. BUT, assuming that this is an isolated renovation that you are working on, which it appears to be, this will not apply.
It seems far more likely that you’ll be treated as engaging in an isolated transaction, and not a business. In this case, there will be CGT and income tax ramifications.
Anything that you do to the property that is deemed to be a repair (restoring something to its original condition) will be a deductible expense [although, for it to be deductible, you’ll have to show that you used the property solely for the purpose of earning income – which I think you are, BUT given you’re not renting it out, I’m not too sure].
Anything that you do to the property that is deemed to be an improvement (used different materials, totally replaced items etc) then those costs are not tax deductible. BUT, they will reduce the amount of CGT you have to pay because you can add them to the cost base of the property. So, you will be able to recoup some of the “improvement expenditure” through reduced CGT payable.
As a side point, remember that you must hold the property for more than 12 months to get the CGT discount.
Hope this helps
Thanks for the tips everyone.
Still not 100% sure what we’ll do, but will consider all the advice!
