Forum Replies Created
Hi Rob
Try Tracey at the Goodman Group on 1300 134 072.
She does all my Victorian purchases and the service level is excellent.Tell her i sent you and she will look after you on price.
Richard Taylor | Australia's leading private lender
Ok one question at a time:
1) What sort of proof do you need to retain regarding the use of the funds?
A) Normally very little evidence all depending on the amount of funds you are applying for. For say a $100,000 Line of credit with funds to be used for investment the purpose of the loan would "Investment Purposes".
2) Is the Line of Credit secured against a single property, multiple properties or nothing.
A) The LOC can be secured against one single property or multiple properties but is always secured.
3) Is it feasible to have a Line of Credit taken out on a currently owned property.
A) Yes this is normal and can a good way to structure a investment portfolio.
4) Would the mortgage on the second property also come from the Line of Credit or is it better to get a seperate loan. And in this scenerio, is the interest on the Line of Credit for the Deposit and fees also tax deductible on the second property provided it is an investment property?
A) Normally you would (subject to equity or LOC limit) look to take a loan of 80% of the property purchase / valuation secured against the IP you are purchasing and then use the LOC to cover the 20% deposit and associated acquisition costs.
The total amount of the interest would be a deductible expense as it is the purpose of the funds that is the qualifying criteria for a tax deduction and not where the loan is secured.
If any of the funds are to be used for personal purposes then make sure you utilise the split LOC facility offered by most lenders.
You would set the LOC up in varying splits with the first split being for personal purchases etc and then the 2nd for IP property # 1 etc etcRichard Taylor | Australia's leading private lender
Also 10% on 2nd mortgage i can do a lot better in lending the funds myself at a substantially higher interest rate.
Preumably you are also offering a personal guarantee with it.
Our wrappees pay 10% and we have the title to the property.
Richard Taylor | Australia's leading private lender
Brett what is it you are trying to find out ?
Richard Taylor | Australia's leading private lender
I would guanrantee they wont.
Even Citibank Australia will not lend on US properties to Australian residents.
The only solution would be to approach a UK lender and as mentioned gift the deposit to you. (In the UK there is a considerably more choice when it comes to Nodoc / lodoc that here in Oz if proving their income is a requirement).
Richard Taylor | Australia's leading private lender
At 58 the Pension would be taxable at your highest marginal rate so not necessarily the way to go.
Richard Taylor | Australia's leading private lender
Even one of the non conforming lenders will not be able to act that quickly you are better of with private funds as long as you can show them a take out strategy.
Richard Taylor | Australia's leading private lender
Regina
Why would not write a covered call against the installment warrant to maximum your returns.
We do this all day long in our SMSF and works very well.
Richard Taylor | Australia's leading private lender
Try Tracey at The Goodman Group on 1300 134 072.
Tell her i referred you as she does all my Vic purchases.
Richard Taylor | Australia's leading private lender
Rubbish a Trust takes about 2/3 hours to set up and would be available for the following day to sign a contract.
Richard Taylor | Australia's leading private lender
Les
Wrapping is certainly just as viable in the right areas.
This day and age you need to adapt the contracts for the right times.We use License to Occupy contracts in Qld now with balloon payments at the end of the 21 year term in order to reduce the monthly repayments. Works similar to a motor vehicle purchase.
Also a combination of shared equity works well.
Richard Taylor | Australia's leading private lender
Rob
Anz Bank offer 100% offset on their 1 Year fixed rate which is unusual and there are a couple of major lenders that offer fixed rates with unlimited repayments and 100% offset.
Best of all worlds.
Richard Taylor | Australia's leading private lender
I live in Chapel Hill about 10 KM's from Redbank Plains and this week alone have applications from 3 separate investors buying in the Redbank Plains area.
One of the problems is that all of the last cheaper homes in Brissie are going by the way side so it is a matter of where to go next.
Dont think you can go too far wrong with the right property.
Richard Taylor | Australia's leading private lender
You are not operating as a Company Trust but the Company maybe the Corporate Trustee.
Tax will be paid by the Company at a rate of 30% however when distributed will come with franking credits so the beneficiares may pay more of less dependant on their own marginal Tax rates.
Richard Taylor | Australia's leading private lender
Rob
Yes as long as the date on the sale contract is after July 1 2007 then the profit will be assessed in the Tax Year 2007/2008.
Richard Taylor | Australia's leading private lender
As you are buying it off a family member why not see whether there is some Vendor Finance option with deferred interest repayments or similar.
Richard Taylor | Australia's leading private lender
90% LVR available at 8.30% as long as you are self employed > 2 years and registered for GST and can declare an income to service total indebtedness.
LMI is around 3% + GST + stamp duty and Bank applic costs around $1250
Richard Taylor | Australia's leading private lender
Whilst not wanting to shoot myself in the foot i cannot see any reason why you would see a financial planner first but more a mortgage broker especially one with property investing experience.
A good MB cannot not only make a recommendation for you for the first loan but start to map out a path for your future investment. He can also look at your current position and make recommendations regarding the way the whole loan should be structured.
By all means if your MB is not also a FP then approach a separate FP when it comes to organising some risk cover which should probably go hand in hand with your investment portfolio.
This day and age with modern technology and email most MB's clients are spread and rarily would you sit down for a face to face interview. I know i for one have clients not only all over Oz but overseas and most of them i have never met.
Richard Taylor | Australia's leading private lender
If you are looking at avoiding LMI then you will probably need to keep the LVR to less than 80% and without actual figures it is hard know whether the available equity refers to 100% borrowing or 80%.
If we assume your valuation is $775K on your PPOR then 80% of this figure would be $620K less your existing loan of $335K giving available borrowing of $285,000. If you take out an 80% loan on the IP then 20% would be $62,000 plus acqusition costs.
Assuming this leaves you with $200K minus the costs of developing it at $180K this will not leave you with much money left.
You could always look to refinance once the development has taken place and this will reimburse your cash funds.
However dependant on what the work to be done is will take time and would mean a delay in investing in the sydnicate.
All of course revolves around one thing and that is serviceability. Without this you wont be go forward at all without some nodoc / lodoc style of loan.
With more information a specific answer cannot be given.
Richard Taylor | Australia's leading private lender
I agree with Alistair i would always be suspicious on a broker who guarantees a copy of the valuation as it means he will not necessarilly be looking after your interests. Altenatiely he could be using a branded mortgage product where instructs the valuation and is marketed under his brokerage.
A good independant MB will use a lender who is best suited to your needs and not his.
Richard Taylor | Australia's leading private lender
