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Look i am not having a go at any of the authors who have have answered already but just be careful in whose advice you do take.
Firstly the equity in your property is the difference between the valuation and the amount currently owed however that is not say you can utlise all of this amount. Normally you can use between 90% – 95% of the available equity.
Being employed with the exception of the retail lenders you would not find a major bank touch you on a lodoc loan as these are normally reserved for self employed clients. In saying this be careful about gettting pushed into lodoc lending when it is not required. Lodoc lending is available on investment loans to a 95% LVR.
Your periods of employed would be fine for a full documented loan however one of the big consideration when you purchase your first IP is the structure you use and the manner in which you set the loans up.
Try to avoid cross collateralising your loans (although your Bank will encourage you to do so) as you will experience problems down the track.
Rather than go back to your own financier why not engage the services of a good MB. A good experienced IP broker can not only set up your structure correctly now but also for your future investment path.
Remember you pay nothing for their services as their remuneration comes from the Banks they introduce your business to.
Richard Taylor | Australia's leading private lender
Chris
Certainly on a serviceability perspective you are not over extending yourselves however i am slightly concerned when you mentioned that the loan on both is $378,000.
I am assuming that you Bank have cross collaralised the loans between the 2 securities (which may effect you down the track) but do hope that the loans are totally separate. If they have combined the loans into one then you really do have a problem.
A little loan structuring never goes a miss.
Also how did you buy the IP – individually or in Trust. If individually I assume that your marginal tax brackets are somewhere equal and you are not expecting this to change in the near future. if not again could be an expensive error and a simple DT structure may have been the way to go if the IP is positvely geared.
Richard Taylor | Australia's leading private lender
As Terry you would want to ensure your Trust Deed was vrey carefully worded given the PR's coming out of the ATO.
If in doubt use a Unit Trust structure.
Richard Taylor | Australia's leading private lender
Just to correct a couple of the facts from the previous post
1) Is there a minimum time limit I have to reside in the property to get the FHOG?
From 1 January 2004, at least one applicant must occupy the home as his or her principal place of residence for a continuous period of at least 6 months, commencing within 12 months of either the date of settlement or the date construction is completed.2) You will not loose your entitlement to the FHOG if you purchase an IP first.
Richard Taylor | Australia's leading private lender
Dont foget guys https://www.donotcall.gov.au is now supposedly up and running and takes effect in a couple of weeks.
If it doesnt crash it is worth registering yourself.
Any broker that is forced to use tele-marketing gives you an indication of the sort of business they run.
Richard Taylor | Australia's leading private lender
You are right there a fair few who dont and many of the majors who really dont understand the concept of an HDT.
In saying there a few good lenders who have no problems.
Richard Taylor | Australia's leading private lender
Superanuation funds CGT at 15% unless the asset has been held for 366 days and then the rate is reduced by 33% to 10%.
Richard Taylor | Australia's leading private lender
Hi there
Yes many lenders do. It is like saying how long is a peace of string.
Each client has different requirements and circumstances so tailoring a product to suit is more appropriate.
Post some further information and we can assist.
Richard Taylor | Australia's leading private lender
Property inspector wont do you much good but if you need a good valuer then try Herron Todd White.
They have offices that cover both North and South side of the city and have a well accepted presence with the major lenders.
Richard Taylor | Australia's leading private lender
A simple Company Search will show the registered address of the Company.
Even if this is at there Accountants / Solicitors office the Directors address will be noted.
Richard Taylor | Australia's leading private lender
Regretfully not. At that level you wont get any lender take a 2nd mortgage unless they do it as a personal loan.
Richard Taylor | Australia's leading private lender
SGB are usually 6 months like most of the majors but in saying that i have just had one approved in 4 months.
Remember SGB self insure so the LMI problem is only limited to them and them alone. Your MB should have pointed this out to you before recommending them. Most lender will go to 95% with the big 2 MI's.
Richard Taylor | Australia's leading private lender
The fact that you have bought under a Corporate Trust structure will have no bearing on the GST caluation as you could have purchased indivually and registered for GST and still claim the Input credits under the Margin Scheme.
The bigger issue would have been the potential Capital Gains Tax. Had the house been purchased in your individual names you could have looked at the CGT concession available if the contract dates between the purchase and sale where greater than 366 days. Now any profit will be treated as trading income and Taxed at 30% under Corporation Tax.
Richard Taylor | Australia's leading private lender
Personally my opinion was similar to Luke's.
Why buy something from someone that obviously has little personal experience in the market and probably has never himself purchased in the US.
Why not use someone with vast experience and a great business model like Chad Simmonds from Melbourne who really adds value to his investors with his actual real live US contacts.
Anyway i guess if you are happy with the end result thats fine.
Richard Taylor | Australia's leading private lender
I dont see a Nodoc loan being a problem but only issue would be the security for my mind.
How small is the unit. If it is a studio and less than say 50 square metres i think we might have an issue.
Richard Taylor | Australia's leading private lender
Remember each lender has different serviceability criteria and what one Bank says you can borrow another may say you can borrow double that.
Nodoc loans are available upto 80 or even 85% these days without declaration of any income and Lodoc loans to 95% LVR.
There are so many ways to work out borrowing capacity it is not funny these days. Lenders take between 70% and 100% of rent and some sensitise the borrowing rate and some take the actual charged rate into account. Some apply their own living allowance scale and some adopt the Henderson Poverty chart. Really horses for course and a good MB should be able to work through this for you.
Richard Taylor | Australia's leading private lender
Joel
Yes it can moved to the new property and is a lot easier if it is standalone.
If it is only 5% of the purchase price then you could have paid the principal off in the next 2 years anyway so would be immaterial.
Richard Taylor | Australia's leading private lender
Joel
There are a variety of family guarantee style loans being offered at present but they all have 1 draw back for the parents.
All lenders will require a first mortgage on the property and this will prevent your folks from doing anything themselves in the future.My preference is that they take the loan out on their property for 20% plus acquisition costs or whatever percentage they are happy with and lend the funds to you at the same rate as they are being charged. You then take out a loan separately on the property being purchased for the 80%. Remember you could get away with only a 5% gifted deposit and that would mean they would only need to borrow 5% of the purchase price but LMI would be charged.
Doing it this way if they want to go and take out another loan for their purposes they can do so.
Richard Taylor | Australia's leading private lender
I think if you approach the deal as a business deal and make sure that you dont loose a friend over something that may go wrong then it is fine.
Personally i would like to see you both provide an equal deposit or alternatively if this is not the case buy as Tenants in common.
Most lenders will take upto 80% of the rental income of the property into consideration (although there are 2 that take 100% of the rent) and many assess at the charged rate rather than a sensitised rate so you maybe suprised how much you can actually borrow.
Richard Taylor | Australia's leading private lender
Yes why not contact our own Chad Simmons who is Melbourne based and a regular contributor to the forum here.
Chad and his US business partner are very active in assisting investors in the Texas area.
Richard Taylor | Australia's leading private lender
