Stay clear of brokers selling properties off the plan!

hang on – you cannot just redraw money. If you do that you will end up with a mxied purpose loan.

yes it is dangerous for the average client out there. most would be none the wiser

The stamp duty on each transfer would have to be at market rates ie on market value. Also. Cgt or income tax would be at market value.

In Nsw you. An generally only get owner builder license once every 5 years. However if you were a builder then no need for the license as you would have a builders licence

Is this in Australia?

Sounds like you mean:
1. Create a company as trustee and legal owner of the property, and
2. the company will act as trustee for 3 separate trusts. 1 for each family.

I would not recommend this because. Setting up a company is cheap so you might was well have a separate company for each trust.

You need to worry about control of the company. 2 families could control the trustee and disadvantage the 3rd family. There will also be deaths and divorces possibly and control could pass to others outside the family.

If there is one company then all members would have to guarantee all loans too. Bad for asset protection and bad for serviceability.

The only positive point is you will only have one asic fee each year which will save you about $220 pa per company.

Before you go any further you should get some good legal advice as there could be asset protection and tax strategies you could utilise.

If unsure ask the clause to be amended to ‘fully aproved’

There are many ways to protect yourself and you need legal advice.

Some things to consider – make sure you have:
documented loan agreements for any money lent or owing
up to date comprehensive wills
avoid dating the same person twice
caveats for any property you have an interest in but are not on title etc.

Many brokers have similar arrangements these days.

Claw back of commissions exist for up to 3 years on some products – this means if you sell or refinance within the claw back period then the broker may have to repay all or part of the commission they received. And that means they could not get paid – or even lose money on the deal.

Many brokers also charge an upfront fee to clients of between $500 and $2000 for residential deals.Some don't but charge you a fee if you don't go ahead with the loan after they go to the trouble of getting an approval,

You have to decide if your broker is worth paying  a fee to.

Do you have another job? Or can you provide 2 years financials?

You may also want to get a LOC over the existing equity now. Then get 80% based on land value and just construct using the LOC – if enough.