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Just be careful with your choice of lenders as you will be amazed at some of the lending nuances.
One lender i can think of will only do a construction loan if the plans specs etc are given to them at the same time with the land application (of course they don't tell you that and will do vacant land loans) and another major lender will do a construction loan if the Building quote includes everything from blinds, to fencing landscaping etc.
Who wants to nominate their choice of blinds and curtains up front ……i ask you.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
If the land is unencumbered then your options are even greater.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Dan
Firstly welcome to the forum and i hope you enjoy your time with us.
I am assuming you are referring to the construction of a duplex or multi unit dwelling.
Certainly such strategy is doable however without further information it is difficult to comment on the minimum deposit requirements.
I am over in Perth in early April and had my honeymoon in the State but must confess i don't know the individual suburbs you are referring to.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Wood
Won't comment on the individual suburbs as I am a Qlder thru and thru (although i am coming to Melbourne for a week early in March) however you need to remember that the key principal for any Trustee of a SMSF is to ensure that your investment choice adheres to the legislation and that is to provide retirement benefits to the members.
That is not say that purchasing a property that has good capital growth prospects will fail to meet the investment objectives of the Deed however the SISA legislation also places an emphasis on income.
As a Financial Planner and Superannuation specialist i see many investors make investing decisions that do not comply with the current legislation. This of course does not mean a well located residential property with good cash flow will fail the purpose test however care does need to be taken.
Buying 2 properties in your fund you probably want to look at the loan structure to ensure that the SMSF does not end up footing the bill for any cash flow shortfall and be reliant on employer / employee contributions.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Good point wilko i am unsure also.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Good point Nigel.
Every property you purchase as an investor / owner occupier you need to remember one day you may want to sell it and need to ensure that potential buyers can finance it.
No point buying a property where you might need 35% deposit (which of course you may have) when future buyers may not and this could delay your sale process.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
As Shahin mentioned you can't choose 'A good' valuer as in most cases the selection is random thru the lenders automated valuation system.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Matt you are correct you wont qualify for a 3rd party loan.
Unlikely that clintron's parents will hold the property in a Trust name being their PPOR but i guess it is possible.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
CC i admire your enthusiasm as i mentioned earlier but hate to say financing has changed a lot since HT's days.
2013 is not conducive to flipping cheap properties with minimal deposit because of some of the entry, exit and ongoing costs.
Then you have the potential issue that it will be considered as trading income and not CGT so do your research throughly.
Don't let this put you off but read carefully and learn from others.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Tom
Always happy to be corrected and agree if in doubt check with the OSR in your State.
Had one recently where a client was buying a multiple dwelling as their first home and renting 3 of the 4 units out.
Reading the legislation i wouldn't haven't thought they would have qualified but the OSR were quite happy and the clients were some $7K better off on settlement.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Mick
Personal opinion is that Nundah is a great suburb and an ideal area to consider a property for a SMSF.
I have done a couple of SMSF deals for forum clients who purchased in Buckland & York Street and the returns are steady and rentals in good demand. Certainly had no issues with the lenders we used on such secutities.
What a lot of investors don't realise is the key principle when you establish your SMSF is as Trustee you are responsible for ensuring that the fund provides retirement benefits to fund members.
I have reviewed many an investors Investment strategy within the Trust Deed and been concerned with some of the investment choices.
A slow steady vanilla investment such as well located residential property ticks all the right boxes.
As long as the SMSF loan is set up correctly i don't think you can go far wrong.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Couple of similar building here in Qld Terry and the odd one or two with covenants like no one under the age of 18 allowed to reside.
If you are in your 50's and the Mrs falls pregnant you are forced to move out !!!! (Or should i say the misses is forced to move out).
Times we live in.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Nick
Welcome to the forum mate and hope you enjoy your time with us.
Always good to see a few more poms on the site to balance out the numbers. (Bournemouth boy here).
Your income and length of employment are not necessarily a problem and the potential joint and severable liability issues when buying with a relative can be overcome with the right lender.
Would need a wee bit more information before advising further.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I have to say that i find it hard to believe that if your Broker ordered an upfront valuation with Homeside surely some red flags would be flying when the valuation came in that much short he / she carried on to lodge the actual application.
Anyway good to hear that everything settled out ok.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Had a new forum client ring me this week whose existing lender had crossed his PPOR and IP.
He had now sold his PPOR and the lender undertook a valuation on the IP which was to be their remaining security.
Unfortunately the Banks valuation came in at 45k less than he paid for the property only 14 months earlier.
Issue now arises that the Bank wanted him to reduce his investment loan by just under 70K.
Course this means he has now effectively lost the interest deductibility of 70K this year, next year and every other year and despite his Bank manager advising him that he should claim it anyway i had to tell him it how it was.
Thankfully we do have a way but of course his Bank didn't provide that option.
Structure it correctly from day 1 and you won't go to far wrong.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Despite Tom's words of caution there are still many a lender that lends on Company Title without any interest rate loading.
Did one on Sydney a month or so back with a purchase price of 929K and 85% was obtained fairly easily.
Might not be be the cup of your Big 4 major but thankfully there are many other lenders out there.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Steve
Matter of watch this space but don't get too excited quite yet.
Went to a SMSF seminar earlier in the week ran by my Financial Planning Licensee where there was an ATO representative discussing their overview on SMSF and the increased amount of borrowings they are seeing coming thru.
At the moment their are adopting a watch and see attitude however it wouldn't take much abuse by certain lenders for tighter controls to be implemented.
I own a fair number of properties inside my SMSF but purchased them prior to 2007 so the current legislation certainly gives investors an opportunity to expand their portfolio with the current 80% lvr's being offered.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
No hate to say you wont be able to finance the deal unless you are party to the Title so you are going to need to physically purchase the property.
Course there are other considerations in regards to finance, structure etc as you don't want to find you end up paying CGT & GST on the property.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I can think of several regional towns with good growth prospects and cash flow properties without having to invest in a town with such a small population.
You need to consider your financing options will be limited in such areas and especially if LMI is involved.
One day you might want to sell the property so remember that potential purchasers may also need finance.
As i said i can think of several areas which would be better to start your investing portfolio.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Have to be honest with a 100K deposit you are far better off sitting down with a Professional and putting in place a structure to enable you to go forward with a spread of investments.
As a Financial Planner if you were a client of mine who had an appetite for 'high risk' i certainly wouldn't let you throw in a 100K to a single property without working out a structure to maximise your return going forward.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
