Before you rush into using the a Deposit Bond work out the cost of the interest for that period of time and weigh this upto the cost of the Bond for the same period.

Also ensure that any new investment borrowings that you draw down from the existing security are kept totally separate to any non tax deductible borrowings.

Great double act folks …………….

Hi aaaworth

Remember if you intend to finance these deals short term and on a full time basis your financier will consider the deal as a development deal and limit the LVR.

The application will more than likely be treated as a commecial proposition and the interest rate and application fees will reflect this.

As SNM has indicated depending on the number of investors and the level of investment will determine what documentation you are require to offer under the Managed Investment Act.

This could vary from a information statement to a full prospectus. Either way it is not cheap. 

W4Life in the UK that is just it they cannot go direct with a lot of institutions.

The same here with a few of the Nodoc lenders.

One of the Big Banks scrapped its 0.7% discount on lodoc loans WEF today and the others will follow suite.

No one said anything about charging 1% brokerage but when i first arrived in Australia we used to charge clients $850 a deal and never had a compliant.

I still do and always have charged for development and comemrcial finance and have never lost a deal on a fee.

Most long standing brokers wouldnt fret too much about a drop in commissions as those who have invested wisely over the years dont rely on their commissions to reap their income. For me it is a matter of helping out clients.

The simple way of working it out is to take your gross income and add to this the Gross rent you receive.

Then deduct from this new income figure the interest for the year all property expenses and the Depreciation and Building Write off from your Quantity Surveryors report.

Calculate the new tax payable on the lower income figure and the difference between the two is what you are likely to get back.

Remember Depreciation and BWO are non cash items so dont you anything.

FF

Based on a Bond amount of $28000 and a term of 15 months max you are looking at a Fee of around $1338.00

Let us now if we can help further.

Hi Michael

In a nutshell…..Do aussie banks do overseas deals now a days – NO.

Certainly not from here. Their overseas counterpart may do but as far as I am aware non of the Australian Banks have a branch network in SA.

Craig

There are a couple of ways to do this however i guess each party will want something different from the deal.

Depending on how long you intend to hold the properties determine the type of structure you may wish to use however either a Discretionary or Unit Trust structure maybe a good starting point.

Financing the deal will be a little different as each party (Director or Trustee) will be jointly and severaly liable for the entire loan. Each partners existing liabilities, income and expenditure will be considered so if each couple has a differing asset base then there maybe some inequality.

More information would be needed to provide further assistance.

I think you have half hit the nail on the head when you say

My mortgage broker is having trouble finding a lender because we have never done a subdivision before.

The other half probably being that your mortgage broker has never done a GR loan.

All things being equal and subject to the location of the property then funding the loan should be achievable through a specialist development lender.

More information would however be needed to provide you with some numbers and costs.