There appears to have been a few responses to this question already but unfortunately a few inaccuracies:

1) As Terry as pointed out your MB may not be licenced to provide you with advice on SMSF unless he is a licenced financial planner.

Remember most Accountants are not Licenced to give advice in this field and can offer limited information.

2) A SMSF can only borrow in certain circumstances and for no more than 90 days maximum.

3) A SMSF is required to undertake an Audit each year but this will not be by the ATO. An independant Auditor undertakes the Annual audit and would only refer the matter to the ATO where there was a clear breach of the Superanation Rules.

4) Your Family Trust cannot sell a residential property to your SMSF (You definately need specialist advice and from somene other than your MB). The Trust can sell the property pay the relevant CGT and then you personally can make a deductible contribution.

There are several key reasons why people may decide to establish a SMSF. These include:

1) Control of your investments.
2) Tax savings
3) Cost Savings

Some of the key disadvantages include:

1) Cost
2) Obligations of the Trustees
3) Administration and compliance tasks
4) Fund perfomance

It is not for everyone but done properly a SMSF can clearly outperform a standard superanuation fund.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Trump Jnr i think is missing the point.

Certainly you can borrow against the increased equity and use the funds raised to act as deposit and costs for further IP’s however the fact of how you borrow the funds has little bearing on whether the properties will be Positvely geared.

This will be determined by the quality of the investment you will make.

As has been pointed out the CGT will be just one of the costs in selling the others being the exist fees, discharge of mortgage etc etc etc.

If you construct a new home on the property then you will be maximising the deductions in both Building Write Off and Depreciation and you could well find it costs you very little to actually retain.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

More or less.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Hi Karen

Assume you have your own PPOR which has $200K of equity in it.
You are wanting to purchase an IP for $200K and you go back to your Bank to borrow the entire amount plus sufficient funds to cover acquisition costs.

Normally your Bank would make an advance for the full amount in the one loan and cross collateralise the 2 securities.

This would carry on with each new IP property you decided to buy.

Several down the track the Bank tell you according to our records you cannot borrow any more money although by now your PPOR is worth $600K and your loan has been repaid.

Regretfully as all of the loans are cross collaratilised you cannot take your PPOR elsewhere as it is being held as security for your IP’s. Uncrossing them now gets both messy and expensive and will depend on the Banks view of each of the individual securities as to whether they will do it in the first place.

A little bit of loan structuring from day 1 would have set you up in a manner where non of the loans are X collaratalised and yyou can keep on going with your wealth creation.

If you wish to sell any of these IP’s all you are required to do is repay the loan outstanding on the particular security. Especially important if you may have triggered a CGT liability and may require cash of of the sale to cover this.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

I totally agree with V8 many FP’s wouldnt even own 10 properties and certainly would not recommend property in their portfolio.

Others of course own a few more than 10 and certainly recommend property where they may personally earn zippo.

It is horses for courses.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

There are 1 or two lenders who have waived their probationary requirements and will lend once you have confirmation of employment.

As Terry states 1 day is sufficient as long as you have continuous employment previously.

Other alternative is a PAYG nodoc loan.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Hi Katie

Thats good news i will hear from you soon.

If the truth be known i was embarrased to be English at times during the Ashes and in the Western suburbs there are no many rocks to climb under.

But heh we are back and the World Cup is only weeks away – whooooo

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Chris

The last development deal you put to me you had negotiated 1% below SVR yourself wouldnt have thought any MB would have got it down to that for you especially on a 80% GR basis.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.

Sorry Paul I hate to say i totally disagree.

IMHO Wealth Creation seminars are just for one thing and one thing only and that is to make the presenters a fortune.

Whilst i dont cast this blanket over every seminar doing the circuit i believe in essence you can spend your money a lot better in doing research and due diligence and talking to fellow investors.

As a Director of a Company called First Home Owners Group Pty Ltd we have built up a portfolio over 180+ properties all of which have been wrapped and used these funds to purchase quality capital growth properties.

I have been asked many times to do the seminar circuit but believe in sharing ideas freely with others rather than profiting at the expense of the inexperienced investor. I myself have been to a couple of free seminars but never found anything new in any of them.

In response to Silverghost question remember many lenders offer 100% financing on investment properties especially if you own your PPOR and all you would need to find is the acquisition costs.

Also certainly do not wait until you have repaid one loan in its entirity before you buy again otherwise your wealth creation path will take forever. Utilise the equity in your properties to leverage off and purchase more.

Simple rules are structure correctly from day 1 and if you can help it never x collaralise. Many inexperienced brokers and bankers have little or no idea about loan structuring.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.