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Saskatoon
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July 23, 2003 - 1:26 pm
Hi Ms Elvis.
I think that the very least you would need will be a full Joint Venture agreement, legally signed and witnessed. I have seen examples on lawyer’s websites, but haven’t kept the URL’s…
Elysium-M mentioned a trust structure – research the kinds of Unit Trusts. One of these may give you and friend more flexibility.
Avoid a ‘partnership’.
Also depends on your aims: 1 IP or 30 IP’s?
What happens if your friend is more or less ambitious; or more or less risk-averse than you?
Research, research, take professional advice – your idea is worth pursuing!
Terry
Terence McMahon
HomeWin
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Saskatoon
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July 22, 2003 - 1:15 am
Hi Maximus.
Haven’t used his services, but bought the handbook ‘Investment structures 2002’ which had been recommended by forumites. I found it very useful, and cheaper than paying for discussions with solicitors & accountants!
Terry
Terence McMahon
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July 21, 2003 - 11:07 pm
Hi Gavalynn.
I agree with Andrew (of course!), but be careful if you are talking to bank staff about finance structures. They know about their own products, but may not be investors. I finished up explaining to our ‘personal banker’ what a trust was and why we were using one.
Terry
Terence McMahon
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Saskatoon
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July 21, 2003 - 10:55 pm
Hi dosser,
why do you intend to use a tax lawyer rather than a tax accountant?
From my readings on this, and the Somersoft forum, other forumites haven’t mentioned using lawyers except for conveyancing. There are lots of resources about structuring your finance if you do a search.
What about Steve’s ‘Wealth Guardian’, or visit http://www.chrisbatten.com.au.
Also, do you have to sell the townhouses? Is it possible to draw on your new equity to help pay off your PPOR?
Email me if you have a question.
Terry
[email protected]
Terence McMahon
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July 17, 2003 - 12:16 am
Hi degsamillion.
The Australian MCI Technologies that I have received glossy brochures from is a company selling computerised share trading software.
From what I have read in the Aust. financial press it would pay to be cautious with any of these systems. Not implying dodgy, but there are a number of trading systems, and apparently some are better than others. Do a search on finance sites.
Why would you sell the “secrets” to a system if it were making you all the money you needed?
Similar to computerised racehorse betting systems as far as I can see.
I haven’t seen info from MCI Tech. that has anything to do with property investment.
Terry.
Terence McMahon
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Saskatoon
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July 8, 2003 - 12:43 pm
Hello Nghia.
There should be no problem using the equity in your IP for a deposit on a house to live in. Note that the interest on the loan will not be tax-deductable, as the loan will not be for investment purposes.
You should be able to increase the amount of the existing loan with your current lender, rather than refinance with another.
Terry
Terence McMahon
HomeWin
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July 5, 2003 - 1:04 pm
Hi Xenia.
A lot of other Aussies don’t know of Saskatoon!
It’s a long story, but I met my future wife on the station when catching the train to Vancouver .
BTW, Robyn wasn’t fazed when I mentioned lease/options! She has been quite efficient in three settlements.
Terry
thanks saskatoon, i will try your conveyensor on my next property deal []
just curious, but i just spent 3 years in saskatoon, canada doing medical research, my son was also born there [][] any resemblence to your alias [?][?][?]
[/quote]
Terence McMahon
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July 1, 2003 - 12:35 pm
Hi Xenia.
I use David Hilton as my accountant.
He is a property investor too:
DHC Group
Level 6, 24 Victoria Sq., Adelaide
8218 4888
My conveyancer is Robyn White
360 King William St
8410 9149.
Have heard positives about Margaret Duncan for accountancy, but don’t have first hand experience.
Haven’t needed a solicitor for property yet!
Usual disclaimers for above – no benefit to me etc.!
Terry
(I do property finance )
Terence McMahon
HomeWin
Finance 0414 356 912
Saskatoon
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June 24, 2003 - 11:37 pm
Hi hwd007.
Who told you that the ATO will fine you?
Why don’t check with th ATO directly – phone or use their website. Besides I believe that your 15-15 variation can be varied during the year.
Terry
Terence McMahon
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June 21, 2003 - 11:25 pm
Hi Cherie.
I use property analysis software purchased from the Somersoft web site http://www.somersoft.com. Other investors also seem to find it very good.There are also free spreadsheets that have been posted by forumites, but I haven’t used them.
Also look at what info. Steve has on this site!
Terry
Terence McMahon
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June 13, 2003 - 10:10 pm
Hi Little Mermaid,
can I suggest that you borrow or buy “DIY Superannuation” by Austin Donnelly. Since you have already started the process this book should give you more knowledge to help you achieve your goals.
Terry
Terence McMahon
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June 2, 2003 - 12:28 am
Hilary,
your last comment has me puzzled. Our family trust has borrowings, i.e. the trustee co. has borrowed for the trust.
Did you mean that a super fund cannot borrow?
Terry
Terence McMahon
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June 2, 2003 - 12:16 am
Sorry, in my last post I meant to write what Terryw wrote, having used exactly that method – before finally paying off the home loan!
I was thinking of an immediate strategy whilst you do your research (assuming you don’t have your savings in an offset a/c); e.g. can you redraw on your home loan? If so, how much, how often, what charges (if any)?
Terry
Terence McMahon
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May 31, 2003 - 2:23 am
Hi New Investor.
You should pay Michael for his great answer !
It is important to have all the legals done to protect your own assets.
Also, while doing research look at unit trusts as a possible structure for your situation.
Terry
Terence McMahon
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May 31, 2003 - 1:53 am
Hi Andrew.
While doing your research put your cash into an offset account against your home loan. This has the same effect as putting the money into the loan itself, but avoids redraw fees and limits. It means you have instant access to the funds for investment, and also your investment monies are kept separate from your home loan (simpler book-keeping).
Terry
Terence McMahon
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May 26, 2003 - 8:14 am
Hi Dave.
Generally speaking keep your property business in a separate entity from your other businesses. I agree with Michael’s suggestions as a starting point (and maybe a finishing point ).
I don’t see how you can ‘convert’ a partnership into a trust, or a company, for that matter!
Do a search in the archives for info about using trusts for asset protection; and also look at http://www.gatherumgoss.com.au. Dale Gatherum-Goss has a lot of supporters among property investors!
If you are in the highest tax bracket then I think setting up the optimum structure for your circumstances will more than cover any setting up and on-going costs.
Terry
Terence McMahon
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May 25, 2003 - 12:25 am
Hi fullout.
Keep in mind that most of these deductions might only be claimable once you have already have investment property. Expenses incurred before purchase may not be claimable!
Terry
Terence McMahon
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May 25, 2003 - 12:12 am
Hi youngie.
Also note that the CGT would only be payable on the amount of CG from when the house ceases to be a PPOR (including the six months grace period?), so if it took even longer to sell then there would only be a few months CG to calculate, almost certainly not 40-50K!
Terry
Terence McMahon
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May 21, 2003 - 5:39 am
Hi Dan260.
A couple of thoughts:
you will effectively be entering into a partnership with the vendor, presumably as tenants in common. I tend to be very cautious about partnerships, particularly when you are jointly and severally liable for debts!
What happens if you have differing ideas about what should be done with the asset?
What if he sells his share to the “Hell’s Angels”?
If the vendor is married, what happens if there is a divorce and the partner wants the property sold?
What if he/she ceases lease payments – can you evict them from a property that they part own?
Could be some interesting disputes.
YOu would at least need some kind of joint venture agreement with solicitors for both sides etc.
Terry
Terence McMahon
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May 18, 2003 - 11:37 pm
Hi Cris,
following on from APIM’s helpful answer. I would be cautious about how you do your accounting with the split loan.
The ATO is not happy with any capitalised portion of interest in split loans being claimed as a deduction, and I believe there is an appeal going to the High Court. See a good accountant who understands property investing!
Terry
Terence McMahon
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