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  • Profile photo of PaulliePaullie
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    @paullie
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    February 6, 2012 - 2:40 am

    The problem with paying down the principal is that.

    A) You limit your tax deductibility in the future if you want to move house.

    B) You risk contaminating the loan if you redraw to purchase something not for the purpose of investing.

    Either way, you'll have done you dough.

    Always go IO and Offset. The only time I would suggest go P&I is if you were not a disciplined saver.

    Profile photo of PaulliePaullie
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    @paullie
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    February 4, 2012 - 2:50 am

    booge

    If I were you, Id refinance the PPOR as interest only with offset and the IP as IO.

    Put any extra money into the offset for your PPOR.

    This way you are taking full advantage of the deductibility of the IP loan.

    The reason to have the PPOR as interest only with offset is in the future if you move house and that becomes an IP, you can shift the funds from the offset to the new offset of your nre PPOR, thereby once again taking full advantage of the deductibility on the IP.

    Profile photo of PaulliePaullie
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    @paullie
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    February 4, 2012 - 2:47 am

    You should speak to a planner at your council, they can guide you on what to do next.

    You dont need house plans to have utilities hooked to land portions.

    If you dont know what your going to do with the front block, then why subdivide now?

    Profile photo of PaulliePaullie
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    @paullie
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    January 31, 2012 - 12:32 am

    tiger_ra, personally I dont think passive CG is going to be impressive over the next 5 years, so the only way to obtain good CG is to create it. Renovations, developments .. whatever.

    4% CG isnt so great either when you can pop your money into other investments offering 4% minimum returns with no risk.

    Profile photo of PaulliePaullie
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    @paullie
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    January 29, 2012 - 11:18 pm

    Why are people renting for more than they could purchase? Can they not obtain finanace?

    Profile photo of PaulliePaullie
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    @paullie
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    January 28, 2012 - 6:08 am

    Thanks very much for taking the time out to answer my questions. Again Im just playing devils advocate for us aussies looking to invest.

    I do believe your offering is unique and is working well for the right investor.

    Compared to the rest of the world current Australian interest rates are a lot higher. The 5.7% I quoted was literally straight off the Commonwealth Bank website, so yes, it is possible to get 6% returns on cash parked in a bank here.

    Unfortunately for you thats probably why you dont have many oz investors on board. The doctors you mention have probably worked out some tax loop to make it worthwhile (purely speculating).

    I 100% agree with you about the 30% returns people are quoting, its simply not sustainable, and if it was that easy why would someone need to right a book about it instead of leveraging to the hilt on them.

    I have a few friends in the US, one with their own law practice, I'll have them to some DD on your company.

    Just quickly, if the property were to go negative equity, do you still sell after the 4-5 year period, what happens?

    Profile photo of PaulliePaullie
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    @paullie
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    January 28, 2012 - 3:26 am

    Ive taken this a step further now.

    On the success stories page, there is a proprty 2261 Paden, which is 2261 Paden St  Jackson, MS 39204.

    Your site quotes:

    Monthly Cash Flow: $247.50

    Investor Equity Day 1:      $16,000
    Note Price:    $33,000
    ARV:    $65,000
    Loan to Value:    51%
    Interest Rate:    9%

    On http://www.zillow.com (http://www.zillow.com/homedetails/2261-Paden-St-Jackson-MS-39204/3044474_zpid/) it quotes:
    Zestimate®: $43,800
    Rent Zestimate:$698/mo

    Why is you ARV over 30% different to the estimate here? Dont get me wrong, I expect to see a difference, but 32%?

    The 9% return your offering is $247.50/mo, thats a $400 difference to the actual rental estimate!!!

    I do realise you guys take care of the reno's. How much on average would you spend on the renos?

    Also, why is the note price, cheaper than the ARV? Significantly cheaper.

    Thanks for your help.

    Profile photo of PaulliePaullie
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    @paullie
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    January 28, 2012 - 2:46 am

    We are currently having ours setup.

    We chose to use a company trustee and directors as custodians.

    A good question is, should another company be used as the custodian? If not are the custodians private assets still protected?

    Profile photo of PaulliePaullie
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    @paullie
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    January 28, 2012 - 1:19 am

    Jay

    I took a look at the website and watched the video, this is basically what I got out of it.

    9%pa returns on your initial investment.
    50% equity split after 4-5 years.

    If I put $200,000 into a term deposit at a local bank, Id get roughly 5.7% interest, maybe a bit more. Over 5 years Id have $265,773.02. Zero risk investment.

    If I purchased $200,00 worth of property notes, the rental return would net me $90,000. If there is CG Id get half. Thats a big IF, what happens if there is negative growth, is the loss still split? What happens if theres another crash in the USA? What happens if the AUD$ heads north like they are predicting, there could be a 10% loss right there. What happens if your company goes belly up?

    Steve Knight appears to be getting 30% returns, why is your company only offering 9%?

    From my point of view, it seems like a lot more risk for little more gain.

    Dont get me wrong, Im just trying to play devils advocate here, and typically I have a low risk level, a conservative.

    Profile photo of PaulliePaullie
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    @paullie
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    January 24, 2012 - 6:13 am

    JLH, Id like to speak to you about your program.

    Email?

    Profile photo of PaulliePaullie
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    January 23, 2012 - 1:55 am

    pfft of course hed say that, he wants australians buying the the usa to help his property recover.

    Profile photo of PaulliePaullie
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    @paullie
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    January 21, 2012 - 3:08 am

    Surely not.

    Profile photo of PaulliePaullie
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    @paullie
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    January 17, 2012 - 10:12 am

    naumo, your not related to jamie and Adam are you?

    Profile photo of PaulliePaullie
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    January 16, 2012 - 12:35 am
    Michael 888 wrote:
    DHCP wrote:
    He Brent,

    You can certainly use your SMSF to buy property in the US which I've done with my super.  ………………………………………………………………………………………………………..Good luck

    Hi DHCP,

    what was the set up you used for the SMSF investment? Did you use C-Corp or LLC to hold your US investment properties?
    I am also keen to go down this path with a straight forward cash purchase for our SMSF, however read conflicting things when entertaining the US entity.

    Keen to hear your experience.

    So how does it work, you require a C-Corp/LLC in the USA? Are the custodians directosr of this?

    Profile photo of PaulliePaullie
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    @paullie
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    January 14, 2012 - 7:44 am

    It has to work in some way like that or no one would combine forces.

    Profile photo of PaulliePaullie
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    @paullie
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    January 14, 2012 - 7:42 am

    I too like Brent and interested in investing in the USA, have similar questions. Have a SMSF being set up now as well as personal cash to invest if the returns are genuine.

    Any help getting started would be appreciated.

    Profile photo of PaulliePaullie
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    @paullie
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    January 14, 2012 - 1:13 am

    To my understanding if a person stops contributing to the smsf then that simply dilutes their share in the portfolio, that right?

    Profile photo of PaulliePaullie
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    @paullie
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    January 13, 2012 - 8:05 am

    Terry, I have no doubt at all, if that happened my brothers would nominate my children as beneficiaries.

    Anything else?

    Profile photo of PaulliePaullie
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    @paullie
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    January 13, 2012 - 7:21 am
    Terryw wrote:
    It may be able to be done, but as trustee of your smsf you would be not acting in the best interest of your fund by putting all of its cash into the one investment. Consider carefully if this is the case.

    It may also be possible to join with a spouse or others to pool your super money together. Many issues here to though.

    Hi Terry. Im interested in your second statement. Issues with pooling super.

    I literally just got back from my accountant about this and we are setting up a family super fund, which myself, wifey, and two brothers will be members of. We have a total of $230k.

    What kinds of issues may we run into?

    Profile photo of PaulliePaullie
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    @paullie
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    January 13, 2012 - 1:06 am

    259

    Jumped 110 points in a bit over a year. Once my development is complete that will jump right up again.

    Although, my income is quite high, i dont think id need that much to suvive comfortably.

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