Forum Replies Created
Totally agree.
Had a forum member ring me during the week who had been speaking to a National Buyers Agent from the forum who told him they focus on new property because of the Tax credits. I find this hard to believe and thought those days had been and gone.
When working with a client to build their portfolio (especially a client still in accumulation phase) and where we are assisting with the property sourcing we would not recommend a new property directly from a developer merely for the Tax credits. Certainly happy to buy new for a client where a real estate agent is involved but Tax credits are a bonus.
We say to all of our students you cannot live on capital growth but you can live on a healthy rental yield.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Johnny
Not only does the existing loan structure sound messy but also going forward does not sound as though you are maximising your deductible interest.
Whilst there is not enough information to make any real structural suggestion you could also look at doing a Spousal transfer (subject to the location of the properties and the marginal tax rates of both of) especially if you are thinking of upgrading the current PPOR in the future.
Personally i think the loans sound like they need a complete overall as LOC have a place in a portfolio but not when they arre fully drawn.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Jamie is correct there are 2 lenders who may consider it as residential and Adelaide Bendigo Bank are one of them.
Unfortunately they won't do it thru their direct channel and only thru their mortgage management channel of which BMM are one of their managers,
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Good luck in refinancing the UK property when you are not earning GB Pounds.
Recent changes to UK lending legislation has meant that you will not find a lender to allow a release of equity unless you are an expat earning GBP.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Tommy
No not at all.
What i am saying for a VF client we would never advertise on a tree or lamp post that we want to buy your home and then try to on sell it.
There are many better ways of joining the dots.
VF is an excellent strategy to increase your cash flow to pay down your buy and hold debt and certainly recommend it as a balanced cash flow strategy.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Martin
Yes and no.
Believe it or not if the town or city is big enough and there are some comparable sales of similar blocks we can still get this financed at residential rates and lvr's.
Just done a block of 7 for a forum member at standard residential rates but as mentioned all boils down to how many other sales there has been.
If not you are down the Commercial path.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Mikko
I have to say if they want to charge you $1500 for setting up the SMSF & the Corporate Trustee then that isn't bad at all.
We charge $1700 + GST and then if you want the Deed updated for free over the next 5 years charge an extra $250.
Course after you have established the Deed you have to set up the Security Custodian Company and Bare Trust Deed which will be a separate charge.
In regards to minimum amounts it is interesting that several SMSF lenders have changed their criteria over the last few weeks mainly to limit clients gearing in property where they have less than a given monetary amount. They have also restricted loans on new property and some even require a percentage cash balance too be held post settlement of the property .
All being equal you should still be able to borrow a maximum of 80% of the purchase price and link a offset account to the SMSF loan to reduce the interest being charged.
There are some excellent products out there and remember you can still invest your own Super in a similar managed fund to where your retail fund has it invested at the moment.
Big plus is the flexibility and choice of investment go forward.
I have managed my own Super Fund for 18 years and would never have it any other way.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi NG
As Terry mentioned i hate to say it is not that easy.
You can't have your cake and eat it.
Very few lenders offer such a products.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I agree with Jacqui in mixing strategies.
When we work with a client especially one still in the acquisition phase we try and mix a combination of buy and hold's with some VF or a raft of other positive cash flow strategies.
We use the surplus income to pay down any non deductible debt on their PPOR and then look at debt recycling so they can re-use the funds for further cash flow opportunities.
Tax credits are a bonus and as we don't focus on overpriced new property directly from developers we find that true cash flow is more important than mystical theory.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Nope not missing anything.
These guys are either involved in Vendor Finance or merely looking to take a Call Option against the property and flip it for a profit.
Nothing new there and always someone desperate who will call them.
Must admit when we work with a client on a VF strategy it is the last way we would do business.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
As has already been stated very difficult starting out.
I remember back in 1996 when I started full time investing and developing in Australia was a matter of balancing a day job as an investor with Broking and Financial Planning in evening and I had substantial cash funds behind me.
Funny that 18 years later I am still Broking however these days it has nothing to do with needing to earn an income from it more a matter of loving to help investors start off their own property investing journey.
Will take time but with the desire and hard work you will get there.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Apart from the every increasing insurance premiums in Gladstone the other real issue is the falling prices.
Biggest issue we have seen recently is the valuation and the purchase price are not coming equal.
Like anything you make you money in the buying of the asset so if you buy right over the long term you will probably do ok.
Personally we wouldn't be putting clients into Gladstone.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Eric, ALI are owned by Met Life in the USA the largest provider of life insurance in the world.
Your will earn a tidy quid by arranging it and you could certainly find that you can dop better thru a Financial Planner who can give you a range of options.
In saying this ALI underwriting is fast and efficient so if you want something immediately you probably won't go to far wrong.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Very true Terry I think we could both name a dozen or two of those tyre kickers.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I don't see an issue as long as the Terms of the Option allow it and of course you have legally indemnified the seller.
Probably are going to want to ensure you have all of the required Insurances in place.
Just remember you won't be able to borrow a cent using the property as security so either need Cash or equity elsewhere to draw upon.
We personally use cash for such projects.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Ivan
Yes couldn't agree it is certainly not for you average joe but done properly I think it works well for the right client.
Property spruiker heaven.
i will bring up the new section at the next Moderator meeting but I think there are a few other forums we would add in first.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Funny how everyone is talking about tighter LVR's however we have just completed a couple of 100% SMSF loans.
Not easy and documentation needs to be bang on but again where there is a will there is a way.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I personally would not be using cash for anything.
You could always borrow 100% of the new purchase price and use your cash savings as collateral security.
As the property increases in value you release the cash security, rinse and repeat.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I am with Terry no way i am aware of avoiding Land Tax in a Company name in Vic.
I was talking to clients on Friday here in Brisbane on a similar matter.
Your land value increases but the individual State thresholds never seems to keep pace.
It is one of the things we look at when we are working with a BA investment client who is looking to turbo charge their portfolio.
Hate to say your advice may not have been so crash hot.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Look have to disagree.
Jacqui (JacM) and I have bought and sold over 260 properties between us for our personal portfolio over the last 17 years and carried out a fairly thorough study with our carpet installers on the last big development we did.
Below is a bit of summary
Wool
Wool carpets remain a favourite for their warmth, luxurious feel and durability. Generally, wool is more expensive than other fibres, but price depends on the quality and construction of the carpet. Wool is often blended with other fibres, such as nylon (see Blends).
Good points
Wool has excellent resilience, so it recovers well from crushing and retains it appearance.
It resists liquid-based spillages and releases dirt easily due to the unique structure of wool fibre.
A good-quality wool carpet should outlast any other type.
Bad points
Unlike nylon, wool can’t be treated for stain resistance, therefore spillages need to be attended to immediately.
It’s generally worth spending a little more on wool — the experts we spoke to agreed that cheap wool carpets should be avoided as the poorer-quality wool yarns are likely to pill.
Where to use
Living areas where appearance is important.
Polypropylene
Polypropylene is a synthetic fibre, popular for its low price and durability.
Good points
It’s a lot less expensive than wool or nylon.
It’s colourfast and durable and resists water-based stains and mild.
Bad points
It’s more likely to show up soil marks than some other fibres, especially grease.
It has a rougher feel and cheaper look than other fibres.
It will wear out a lot sooner than other fibres.
When choosing polypropylene, make sure you buy loop pile, as the pile flattens easily (see Cut or loop?).
Where to use
Rental properties, playrooms and garages — or for those who are on a budget.
Nylon
You might remember the cheap and shiny nylon carpets of old, but improvements over the past decade have made nylon the market dominator. The biggest advance in nylon in recent years is the expansion of solution-dyed nylon in the residential market. In solution-dyed carpets, colour is added to the fibre during production, rather than applied to the surface afterwards, meaning it’s more colourfast against cleaning and sunlight. It’s very stain-resistant and stubborn spots can be removed with bleach-based solutions without damaging the carpet’s colour.
Good points
Nylon is a tough and durable man-made fibre.
It resists mildew and insect damage.
Many of the better-quality nylons mimic the luxurious look of wool with added stain resistance.
Bad points
Make sure you avoid cheap brands of nylon, as they can flatten and matt rapidly and may also have problems with static electricity.
The range of solution-dyed nylon is still fairly limited but increasing all the time.
Where to use
High-traffic areas for families with children and/or pets as you can get stains out of it easily.
Blends
The luxurious Axminster and Wilton carpets use an 80/20 wool/nylon blend.
Good points
This blend has the same quality and durability as pure wool.
These carpets are known as woven because the individual threads are woven into the backing, rather than stitched as with the regular tufted carpets, which makes them extremely durable.
Bad points
50/50 wool/nylon blends as they can be difficult to clean, as stain-resistance can’t be added to the nylon when it’s blended. These blends also tend to use poorer-quality wool yarn that will pill.
There are many ways to treat Carpet Beetle so just a matter of getting to the route of the cause before it gets too bad.
On a separate note i am surprised your Insurance didn't cover it.
We have similar claims covered thru our Insurance Broker on a couple occasions for our BA clients.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
