Hi Gav,

I have an acquaintance who was able to backdate an ABN for 2 years. He used this to qualify for a low doc loan. I think he also did the same with gst registration. Maybe some Mortgage Brokers on the forum could qualify if this is a suitable way around your problem?

Ian

Leave it as it is Swany. It's acting like a LOC anyway so there is not really any difference than an offset ac. Once it becomes an IP then, as you say, look at running it to suit your circumstances at that time.

And BTW – unfortunately I'm no IP guru. Still on my P's

Ian  

I am no solicitor but the contract price has always been the final price in my experience. You don't have to pay gst on top of that.

In 1992 we purchased our first IP. I don't know how we got the loan. We were on the dole! I guess it was a CF+ property so they – Metway Bank – thought it was safe territory.  A brand new shop in a block of about 5 on the sunny Sunshine Coast. Well the sun didn't shine for too long. Yes there was a lease in place – with a beautifully presented Curtain retail business – we saw it through the window on a Sunday afternoon. Purchase price – 100k – leased for over a thousand buck a month. What a great investment. We don't have to put any money in at all!

It wasn't long before disaster struck.     Little did we know – and we didn't bother to talk to them before purchase – the tenants were on the edge and soon were bankrupt. Didn't give us a cent. Months later we finally got a new tenant at 760/wk. Not only that. A new block of shops were approved nearby which soon flooded the town with empty shops. When the new tenants bolted before their lease was up we were stuck with an unwanted IP. We ended up selling the thing after 4yrs for 48k.

Of course there was a boom just after we sold. I never went back to find out the value post boom. Was too busy with building PPOR.

Gratefully our fate changed for the better. Doubled our money in 4yrs on a PPOR in Newcastle and then purchased land and built house in Northern NSW  for total of 200k in 2003. 5yrs later it's worth 600k and has enabled us to draw on equity to enter the market again. Now doing residential instead of commercial and getting ahead – with first duplex project complete, second duplex approved and ready to build, and third duplex block under contract. How things can change over time eh!

Hi Trance,

Most managers provide a glossy folder of comprehensive information that sets out their responsibilities. If you go through someone like Hookers or PRD they usually come as a standard. If you haven't done it yet, get them out there to the house to give you a rental appraisal with the follow up gloss. Then you can decide which one suits you. Let them know that you're getting at least one other quote. I got a good discount without even asking just by indicating they have competition.

Ian

Hey Richard, (or anyone else)

Can you use equity gains in a completed project as income. eg: A recent duplex that I completed was revalued at nearly 200k over my cost price upon completion. Will any lenders consider this as income even though it was for an investment purpose?
My current broker considers it as income for low doc loans but could I use it in a full doc scenario?

Cheers, Ian

I think this one would test many people who are ethically inclined under normal circumstances which I am sure Linar is one. That's why he is undecided as to which path to take. We all have our moral dilemmas in life and have to live with the results of our decisions. I usually try to evaluate if my action is creating unfairness or harming someone directly or indirectly  and base my decision on this criteria. Linar is well within his legal rights to pay only the contract price despite agreeing on the higher price. I thank and respect him for sharing this dilemma as it stirs sentiment in each of us and allows us to reflect on our own moral traits.
I hope he can achieve true wealth – earning a sound livelihood while maintaining a clear conscience.

This may be the case Linar. However don't you think that the Developer may have children and elderly parents and also may be a decent person making a living to support others? They also may be charitable people who contribute to society in many ways. It would be wrong to assume that this person deserves to be treated in a different way owing to his business being "large scale". 

Regards, Ian

I totally agree with Tracey. I think a clear conscience is much more valuable than any amount of money. Treat others the way you would like to be treated. This will make the world a better place.