Damian

You need to hold the appropriate license required in the State where you intend to operate.

Whoever has told you that you can do a JV with your SMSF is pulling the wool over your eyes as it breaches numerous Sections of the SISA legislation.

These structures are outlawed and those that were approved previously have until June 2009 to recall them or face the financial consequences.

If you are asking whether your SMSF can borrow in it is own right and the cost for setting up the Installment Warrant / Bear Trust to undertake such borrowing then $9500 is a reasonable amount to be charged.

I have done about 8 of these deals since last September when the legislation changed and have seen clients charged upto $18000 for exactly the same structure.

The fees you pay on a Strata Title unit comprise of the administration and sinking fund and the amount of each is shown in the Disclosure Statement prepared by the Body Corporate Manager.
 
The admin fund looks after the day to day running of the block including things like insurance, grass and garden maintainance, postage, BCM fees etc etc.

The sinking fund is a provision for capital expenditure and obviously would be greater as the building gets older.

The amount of each will vary depending on the number of units in the block but the amount held in the sinking fund will have a bearing on your sale price. Obviously if there is sufficient funds to enable the owners to carry out expenditure without having to call on the unit holders for extra money this is more advantageous.

KYL

Irrespective of whether you claim the interest or not you cannot draw down funds from personal equity or cash and buy a property in your SMSF name.

As i mentioned you are legally allowed to borrow in your SMSF as long as the type of security is an acceptable class.
Not vacant land.

KW

Before you jump in there with all the expense just make sure that is really what you need.

Whilst i cant think of too many lenders who charge more for borrowing in a Trust I can think of a lot that dont offer such favourable rate and fee discounts when the Trustee is a Pty Ltd Company.

Also i would talk to a good Property Accountant specialist before going down the PIT route as the ATO have certainly some raised eyebrows on these types of structures and financiers have followed suit.

The decision as to whether the income is treated as Trading Profit is not yours but the ATO and convincing them you are developer will involve doing more than just the 1 development.

Also there are a few pluses and minus of such a strategy so careful consideration is required.

If you need the name of an expert firm on Property Investing and Trust structures let me know and I can give you Steve Hodgkinson details. Steve is a partner with the Gold Business Group in Southport and a good supporter of the forum.

I have referred dozens of clients to him from the forum and everyone speaks so highly of his advice.

KW

Not sure who told you that lenders will not lend to a Trust structure because that simply isnt true.

Admitedly some lenders are not keen but a good mortgage broker should be able to guide you through the maze.

As to whether this structure is the right one for you without a lot more information on your investment objectives and your own individual circumstances is to development to comment.

M3

Assuming everything else you maybe able to take out a Line of Credit secured against their property in their name and they in trn lend the money to you at the same rate.

Most lenders are going to want to now what the purpose of the loan will be but done properly all should be ok.

Your mortgage broker should be able to point you in line with the most competitive deal which is right for your circumstances.

Hi Natasha

Good luck in obtaining finance for a FN.

One lender we used to use a lot WAMU actually became a victim of the credit crisis and folded at the weekend.