Hi Lake

Welcome to the forum and I hope you enjoy your time with us.

I agree with Imulli that you need to decide what your investment objectives are before you decide on a what entity you intend to use. A different entity would be used for a + geared property compared to a – geared property and the same depending on whether the property is a buy and hold or a buy, renovate and sell.
 
In saying this irrespective of how you buy the property how the loan structure is certainly important and whatever you do on the basis that the property is to be longer term buy and hold do NOT use your Line of Credit to acquire the property for cash.

There are a couple of ways to of structuring the loan to avoid X Collateralising the 2 securities and still borrowing 100% plus costs but care needs to be taken in setting this up.

Without more information it is difficult to give you structured advice so feel free to drop me a line with a little more detail if you would like me to make some suggestions. 

Remember ther Grant is a Federal Grant and only adminstered by the individual States.

Where a property is held as Tennants in Common as above the apportionment of the expenses and income is as per the Transfer document.

In the example you have shown 95 / 5% is correct as is the way the deduction would be calculated.

Sorry irrespective of the recent change in rules a residential property has always been able to be held in a SMSF and certainly does not infringe the Inhouse Asset Rules.

The property could not be rent or occupied by the Trustees but certainly could always be rented in the open market.

The change in SISA legislation last September meant that the Asset could be purchased using a 3rd party Warrant (Bear Trust) and this entity could in turn borrow from a separate lender or the Trustee themselves using a Line of Credit on their PPOR.

Unfortunately the Tax legislation has meant that these new entities are open to strict audit each year and therefore the structures should be set up by specialised lawyers. If the SMSF does not make provision in the Trust Deed this will need to be reviewed and is not cheap. The last one we did for a client last Monday they charged around $9500 merely to set up the Trust Deed with a Corporare Trustee. Other lawyers i have seen will charge upto $20K.

Once the Bear Trust has been established then you are free to purchase your own asset (Subject to of course finding a lender lend against the security) and there will be no ongoing fees other than the usual annual audit fees from your Accountant.

Wooooow be very careful consolidating accounts especially if there is a mix of investment and personal debt involved.

Unlikely the NAB will waive their DEF however that is not a particularly high amount in this market place.

If she is going to refinance it is best that she try and ensure the loans are structured correctly to avoid any mess in the future.

Without knowing the actual figures it is difficult to make any real suggestions on the loans should be structured.

If she wants to shoot me an email I would be happy to make some recommendations. 

No problems.

A LOC or Line of Credit is merely a secured loan which has an approved credit limit with interest charged on the drawn amount. It is like an overdraft with the limit normally based on the security amount.

The limit can be made up of 1 loan or a series of sub loans which can be used for different purposes.

One of the beauties with a LOC is the flexibility in that once approved you are not normally required (Varies from lender to lender)  to have the limit reviewed each year and the funds can be used for any legal purpose.

Structured correctly they certainly have a place in investment and loan planning however too often are sold by loan minimisation companies as a quick way of repaying your home loan off quicker.

You just have to be careful when utilising a LOC for investment.

Simply an IO or Interest Only loan is a loan wherby on interest repayments are made to the lender and nothing comes off the principal balance.

If you start with a $100,000 loan then in 5 years time the loan will still be $100K.

There are numerous advantages which include:

Reduced loan repayments.
Tax effectiveness when you have other non deductible debt.
Cash flow to allow you to widen your investments.
Flexibility when it comes to loan planning.

Etc etc.

Hope this makes sense.

Yes i agree it does seem a big difference.

Maybe get your broker to commission a 2nd valuation and see what that comes back at.

ING are another but i must admit i prefer the Dragon for service and range of product.

Sheep

Normally yes unless it is a franchise or similar you are unlikely to obtain much in the way of a LVR on the business itself.

Residential / commercial security will always give you a sharper rate and terms.

If the business has equipment or inventory then finance can be arranged against these items but normally short terms 1-4 years or similar.