Forum Replies Created
Hi Floody
Yes ideally i think in your situation i would be looking at something circa 250K however i was merely saying that you could go to 400K.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Why do you want your unit valued ?
For borrowing purposes you wont have a choice but get your existing lender to do unless for some reason you are thinking about refinancing.
Get your broker to organise it for you.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Very true SNM i see it every day of the week.
Actually had Solicitor client only last week who signed the contract in the wrong name despite me telling him on a couple of occasions.
The other error we see a lot is the Certificate of Insurance as many clients believe this goes in the Security trustee name which of course it does not
Totally agree no problems in buying in Super but make sure you use someone who has done one or two of them before.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
With 100K in Super you would probably be looking at a property of circa $300-400K rather than 1 for 250K.
Even with the associated costs (and these have come down considerably over the last few years) you can still get good value with 100K in Super.
We have set up a number of SMSF's for forum members over the last couple of months with a lot less than 100K in their rollover.
Many ways of increasing your balance / lvr.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Agree Jamie but be surprised how many of the big 4 wont be telling their clients they are paying thru the nose for their financing and could do better elsewhere.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
nikki we hear it every day of the week from forum members but hate to say it is simply just not true.
In the main you will not borrow more by doing it thru a Trust.
There is a few things you can do to to enhance your prospects going forward and turbo charge your portfolio but that is not one of them.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
As has been mentioned just do a forum search on both the Club and their founder and you will get a variety of responses.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
John i think you have answered your own question about the properties the promote.
I say to any client we source a property for ask yourself why these companies only promote new property.
Simple answer is that it is very hard for the valuer to ascertain the true price / value of the property due to the secret marketing commissions paid by the land developer / builder.
Nothing wrong with a established property.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi n00b1
Firstly welcome to the forum and i hope you enjoy your time with us.
Certainly renting out the home is one option but of course will mean you will be increasing your non deductible debt and only be able to claim the interest on your current PPOR (Future IP) at the current level of $150K so not ideal.
Not sure which state the property is in but might be worth considering transferring the property into either your name if it is likely to be negatively geared or your wives name if it is positively geared.
Have to say CBA do not have the best serviceability model so probably could do better.
Either way make sure you don't cross collateralise your securities as it will limit you in the future.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Rick
There are so many things you need to consider before rushing out and transferring the property to your partners name.
That strategy in its own right might cause you more trouble in the long run especially as the value of your PPOR increases.
As JacM has mentioned why wait to save up for a IP deposit (which in itself is not a sensible strategy as you want to increase your deductible interest and reduce your non deductible interest) when structured correctly it would be possible to start investing now.
Although Wilko is correct normally you would secure 90% lvr on the security of the property itself and look to raise the balance of the purchase price and acquisition costs from a separate loan we have been successful is arranging 100% loans for clients at standard housing rates on selected properties.
Personally if you are starting out i would dip my toe in the water and start off slowly.
Look to buy in your own personal names to start with and claim the deductions you can which will assist you in paying down your PPOR.
I am working with a couple from the forum at the moment in a very similar position to yourself .
We have sourced for them their first investment property and arranged 100% finance for them including their acquisition costs on the security of the investment property itself.
Property is yielding > 6% and they are ready for us to go again.
Can be done just need to start slowly.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi BLG
As Jamie mentioned welcome to the forum and I hope you enjoy your time with us.
I agree that normally an offset account is recommended where you have surplus funds and assuming you have no PPOR loan.
In saying this makes sure that you don't end paying more for the loan by way of monthly fees, charges or a higher interest rate only to find out that the benefit you get back is reduced due to the dwindling cash left over after the settlement.
As the property is going to be an investment property there will be no Stamp Duty concession so you will be paying full duty on the purchase price and that together with the deposit will consume a reasonable amount of your savings.
I would have perhaps looked a bit further afield and worked backwards. Think how much you need by way of deposit and acquisition costs to buy the 2 IP's you want to acquire in the next 12 months and then see what sort of loan you probably need for this property.
There are a few little niche products which are worth considering if you are ongoing income but have limited deposit savings.
Remember the chances of being able to draw equity out of the property being a new house and land is going to fairly limited over the first few years so you don't want to find you have used all of your savings on the first deal and have to sit on the side lines for a few years because you have got sufficient amount to cover future deposits / costs for further Ip's.
Getting it right now will set you up well for the future.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Yes Linda
Totally doable and something we have done for clients on several ocassions.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Firstly welcome to the forum and i hope you enjoy your time with us.
I think it a very noble to want to buy a property whilst still at university but i am not sure it is doable on a part time job.
Remember lenders still apply the same criteria as they would if you were on a full time wage and had 2 kids etc and that relates to serviceability.
I assume you are single so immediately you are allocated a living allowance which is somewhere around the $1200 mark / month and then from that you add in an amount to cover potential rent or board etc (even if you live at home some lenders throw that in) percentage of any credit cards, hecs debt etc.
Your net income needs to cover not only these expenses but also your loan repayments based on a P & I loan over a sensitised rate off upto 2% higher than the actual rate.
Then deposit. No sure which State you are in but in the main the FHOG has disappeared as we now it and now only applies to new property or something you build.
Remember even if you do qualify for the First Home Owners Grant you need to ensure you comply with the terms of the Grant and one of them being you live in the property for 6 continuous months starting within the first 12 months.
This means you could rent the property for a while.
Not saying it can't be done just make sure you don't leave yourself short.
Good luck going forward.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Personally i would prefer and support an Accountant from the forum who offers there time and answer questions for free to members.
Steve Hodgkinson has been my Accountant for 17 years and looks after my entire portfolio.
He has been a forum member since 2003 and has helped hundreds of our forum clients.
Based on the Gold Coast is an expert on property structures and has forum members fly in from all of Australia to see him.
Well worth it.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Kallan
Welcome to the forum and I hope you enjoy your time with us.
There is no easy answer to becoming financially free and it certainly won't happen over night.
Took me 10 years to build my portfolio and another 6 to have almost the entire investment debt repaid.
In saying that if you start small with the right advice and structure anything is possible.
When working with clients we focus both on short, medium and long term goals and try and add a balance of yield and capital growth to their portfolio depending on where they are in their wealth creation. You cannot live of capital growth so with interest rates falling cash flow becomes important so we try and structure the loans and property acqusitions accordingly.
Buying in your own name is totally different to buying inside a Self Managed Superannuation entity but structured correctly there is no reason why you can't do both.
Certainly the number of SMSF structures and loans we set up is on the rise.
Obviously without more details it is difficult to give an accurate assessment of your position however your amount of non deductible debt is fairly small so no reason why you can't look to expand your investment portfolio accordingly.
One of the our favoured products for forum investors is a niche product we designed where investors can borrow upto 100% of the purchase price of their investment property without needing to provide collateral security of their PPOR or their own cash savings.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Sil
Ok couple of factors worth considering here.
Your equity position is fairly limited and has been stated big difference between a real estate valuation and a bank valuation.
Get your Broker to run an upfront valuation to see what useable equity you have.
Looks like it will be a matter of going to a 90% lend so going to be limited lenders who will allow "cash out" at that lvr.
Assuming that looks ok then use these funds to cover your deposit and acquisition cost for the new IP.
You are going to struggle to finance the renovation costs unless they are carried out by a Licensed builder on a fixed price quote.
In saying do have one product which might be idea for such a venture as it would also provide you with funding to potentially carry out the subdivision down the line also.
You do not mention your current living arrangements so i assume their is some liability there but with some clever restructuring no reason why it cant be set up correctly to enable you to go forward in an appropriate manner.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Chris
Hate to say no is no easier.
Still no UK lender that will lend to a expat or non resident.
We are off there for 2 months come November on a buying spree for clients but financing this time will have to be more creative.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Terry
Never like to disagree with you as you know but might have to to so on this one.
http://law.ato.gov.au/atolaw/view.htm?docid=AID/AID2010162/00001
We have done a number of deals for clients this way thru a couple of leading Accountants in Brisbane and never had it raised.
Several of the clients have been fully audited without issue.
Easier where you work in an offset account to the mix.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Hi Michelle
Firstly welcome to the forum and i hope you enjoy your time with us before you set off travelling.
Retirement when you are young isn't all it cracked up to be without careful planning. I was fortunate enough to retire at 40 and be in a position to comfortably live off my rental income for the rest of my days.
I had 3 children between the ages of 5 and 10 so travel was limited to school holidays etc. When you wanted to play golf or go out most people of your age were working.
There is a limit to how much gardening you can do and bike riding up and down the hills of Brisbane's Western Suburbs.
So i ditched the idea of retirement and set up a boutique Financial Planning / Mortgage Brokerage / Property Investment Sourcing organisation to help other forum investors enjoy what i was lucky enough to have.
What you have to understand there is no quick fix to early retirement as it takes hard yards and careful planning.
Sure there are a number of techniques, cash flow strategies you can adopt to increase your long term wealth but these won't be achieved in 3 years.
Ask yourself how much do you need to enable you to travel and work backwards.
I adopted a slightly different strategy to most and paid down all of my investment debt to position now where the expose on a $24M property portfolio is under $1M.
Be realistic and talk to other investors who have been there and done that and see what they did to achieve the same thing.
What fits one client does not fit everyone and this is the message we put out at our investment workshops.
Get yourself mentally right and with the right attitude and you will get there with discipline.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Have to agree with what the others have said. Borrowing in Super is my favourite past time.
I started my own SMSF in 1995 with $60K and now it has over $4.3M in a variety of asset classes including a number of propertied which unfortunately I had to pay cash for as they were purchased pre Sept 2007.
Flipping is certainly allowable inside a SMSF however the set up costs may in road into your profit and you would not enjoy the 10% CGT concessionary rate if the asset is held for less than 1 Year.
If you intended to consider that you may want to look at a Related Party Loan where you could lend money to the Super Fund at a cheaper rate.
Maybe borrow it personally at say 5.5% and lend it out at 4.5% claiming the Tax loss in your own name.
This is only one strategy we work thru with clients looking at starting their SMSF portfolios.
In saying this remember the goal with investing in Superannuation is to provide retirement benefits for the members and therefore your choice of property should cater for this.
We work with forum investors all day long setting up SMSF's structures for them and then buying a property tailored to their goals.
Don't try and make it a quick fix but use gearing to your advantedge to build up the pot of gold which you can enjoy in later life.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
