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As long as you have a good income, you could borrow 10% deposit (plus costs) and then get a 90% loan. YOu must be able to demonstrate you can service both loans though. Usually personal loans are short – up to 5 years and have a high interest rate, so the repayments are fairly high, making it hard to service.
Terryw
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I beleive 90% LVR is possible in NZ. The property Guru knows NZ finance better than me, I’ll ask him.
Terryw
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What do you mean by Business? If it is just a business name, than you cannot buy property under this. If a company you can, but it would certainly be better to buy a property using some sort o trust.
Lucifer – what do you mean that trusts get a 15% discount on CGT. It should be 50% discount for assets held more than 12 months.
Terryw
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You can generally get 95% loans for most areas of Australia up to about $150,000 properties. Just check out your postcode on the link provided by Woodsman. The shorter version is:
http://www.pmigroup.com.au/LocationWizard.aspAnd I agree with Michael, it may not be a good idea buying in these small towns. But it can be – one of my clients had a 30% increase in value in a few months, with the proeprty being positively geared. I suspect that these figures won’t be this good for long.
Terryw
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Hi
It is very easy getting a loan for a trust with individual or corporate trustee. Not much different to getting a loan in your own name really.
Its probably not worth transferring existing properties into a trust because of the stamp duty/CGT issues. Just do it from your next proeprty.
Trusts can be setup for as little as $137 from http://www.cleardocs.com.au
Running a trust does not cost much either, just a tax return and some accounting. Some accountants charge $1100 per year to run them, others much less. If you have a company as trustee, it will cost another $1000 at least (as more than $800 goes to asic for their fees). Companies also have other fees anually – approx $350 at least.
http://www.gatherumgoss.com for trust magic, cost is about $99. – worth it.
Terryw
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It may be hard to get finance for these ‘retirement’ units, be wary!
Terryw
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Since you both lived in it before renting it out, you would probably be able to rent it out for upto 6 years and treat it as your PPOR and therefore avoid CGT – if this is your only PPOR.
Terryw
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You probably shouldn’t listen to any stories, just get them to deal with the agent, but now that you know, it will be hard to get them out in this situation.
I had a similar situation with an unmarried woman on disability pension who also needed an operation. I just threatened to kick her out for being behind and she soon caught up.
Terryw
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Oh, maybe David is talking about ‘bird dogging’, in whihc case you would need a licence in many states including NSW.
Flipping is buying a property and onselling before settlement. Some people try to do it using ‘and/or nominee’ on the contract and then nominate someone else. THis is not illegal, but back dating nominee agreements to avoid stamp duty would be.
Terryw
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Andrew
Randwick is a very good area, I am sure long term it will be a good investment. You can get a valuation for a property, even though it is completed, but banks probably will want to wait. It is better, probably, to get a few quotes from agents, tell them you want to onsell it and want an appraisal.
If you can send me your spreadsheet, I will have a look at it.
And even if construction is complete, it still may take a while – maybe months- before all the necessary approvals, and connections etc are obtained, so it could drag out over the sunset clause. This happened to me in Melbourne, but I was able to get out if the contract as it went over sunset clause and I received all of my deposit back.
Terryw
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Why would you think it is illegal? How could it be illegal to onsell a property?
Terryw
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Hi Nat
It may also depend on size – size does matter! Various banks have so called professional packages offering tiered discounts based on the total size of your loan(s).
Terryw
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Yes you can pay cash for your house and then get a mortgage later. But beware of tax implications!!
If you pay cash, then there will be no debt on the property (obviously), if you then get a loan, what is the purpose of the loan? It is not to buy an investment property – as you already have it. It would be to mortgage someting you already own. Therefore the interest would probably not be tax deductible.
However, if the cash came from a LOC, then it is a different story. Drawing money from a LOC is really borrowing money. You new loan will be replacing the existing loan. Therefore it would probably be ok to claim.
Please check this with an accountant.
Terryw
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I was reading up on bankruptcy the other day, and if someone receives money or assets from a deceased estate while they are bankrupt then these can be taken by the bankruptcy trustee. Death is usually unplanned and so you wouldn’t want someone to die and leave you a lot of money while being bankrupt. Therefore having a will where the money is left to a trust would be most beneificial. Testamentary trusts may be the way to go, just in case.
Terryw
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If you initially lived in the property and had only one, it may be CGT exempt. If you rented it out first, then you may have to pay CGT on a portion.
Generally CGT would be calculated based on profit less costs such as stamp duty, legals etc. this is then halved and that is added to your other income.
Terryw
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Gee you were lucky!
Terryw
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heaps of ways such as:
-adding value to increase equity
-lease optioning your property so you can collect a deposit which can be used for the next one
-wrapping so you get a deposit
-buying something undervalue
-stacking the contract to a higher amount with a rebate at settlement (some people consider this illegal!! – its not).
etcTerryw
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Forget to add, other than that, what you have written sounds correct.
Terryw
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Go to http://www.lawcentral.com.au and have a look at the “Buy a House with Friends Agreement” cost is $220.
Terryw
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And don’t forget stamp duty!
Terryw
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