Hi guys,

I am entertaining the option of 'Rent by Room' as part of my investigations into ways I can leverage a property in an attempt to manufacture a postively geard solution.

I am not surprised the logistics of managing such a scenario is a potential mine field.

Mario

Hi Terry,

The reason I am exploring some form of partnership or JV etc. is to deal my servicability challenge.

I am asset rich (enough equity for about 3 deposits, maybe more. All in my PPOR) and cashflow poor (enough to satisfy the banks of servicability but not enough to warrant substantial negative gearing).

The advent of using multiple trusts to deal with servicability is not an option anymore which leaves leveraging a groups cashflow.

Which scenario would you go for?

JV? Syndicate? or Company?

I have a family trust already set up which I hope to accumulate a number of IPs for the benefit of my children. I am thinking I will need to create a separate company to enter into deals and then transfer to the trust at the end of the deal or do I simply use the trust straight up? Should there be another layer of entities?

Mario

Thanks for hearing me out.

Martha,

Do you know how syndicates are different from partnerships / companies?

Is it a tax thing or Liability thing

Is it simply a Memorandum of Understanding thing? JV etc?

Or, is the word 'syndicate' interchangable with company etc?

Mario

Hi all,

It seems this topic is taboo?

Should I be posting somewhere else?

Mario

Hi Richard,

Basically, irrespective of the structure or creative investment techniques, everything is driven by your personal debt servicability loading (30% rule of thumb).

I don't know about you but  I am not an overpaid executive with an realistaic salary package.

Is the only way around this to have a money partner?

I guess a 50% share of 100 houses is better than 100% of 2,3 or 4.

Mario

Hi guys,

Thanks for the links. They are great resources for getting the info.

Now lets talk about how I should use this information.

I need to understand why a piece of information is Good or Bad in reference to being a property investor.

For example JacM has a really good post above. It tells me what information to look for and where to find it. 

Quote  "….is there a new train station or train line on the cards?  Or perhaps a major shopping centre or new major road?  Follow the infrastructure, they say."

But, is this good info or Bad info? and why?

Making good decisions is based on your ability to understand what you are looking at and how that influences your preferred method of investing.

Hope I am making sense. I just want to put all the hours of researching and finding all this lovely information to good use.

Mario

A JV sounds like the type of arrangement I would look at.

Essentially, there are a few people I know who have money but are not interested in doing the actual work. They just want the opportunity to get a return on their cash investment.

I appreciate that each project would sit under its own structure. I am assuming the vested parties would all be named in some way in that structure. 

As a company they would be named as directors. As a trust they would be beneficeries. Could it be a simple "Memorandum of Understanding"?

Also, what would I expect to pay for a JV agreement?

Are there any standard proformas available like a will kit? 

Mario

Hi guys,

Thanks for the replies.

At this stage I am only focusing on understanding the different paths that are available to me that will get me to my goal.

That is – "A property portfolio that is generating an income 20 years from now equivilent to 30K/yr in my pocket in today's dollars"

Understanding the paths available will show me what structures, cashflow and time I need today to achieve this goal. The path I choose will be my master plan (subject to yearly assessment and adjustment).

Having a master plan will also allow me to ask the right questions of my expensive advisors- accountants, lawyers etc. 

How have others here tackled this critical task of creating a master plan?

Mario