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you can do a title search for $8 at http://www.lands.nsw.gov.au/OnlineServices/DIYSearch/default.htm
Terryw
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ring a valuer from the yellow pages and pay $300 approx. Could save you thousands.
Terryw
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Oh. I think it has sunk in.
You are purchsing a property, and the wrappee is moving in on the day you settle. I was wondering why you would need a loan if flipping.
You will not be able to get mortgage insurance for a property to be wrapped (if you tell the lender). If you don’t tell, then it may be possible, and this will mean less of your money is in the deal, saving more for the next deposit.
I don’t know what your solicitor is talking about. You will have to pay stamp duty when you settle, and your wrappees will have to pay stamp duty on their purchase too. The timing will depend on the state. In NSW, it would be within 3 months of exchange, in VIC I think it is on settlement – ie cashout.
You could not use and/or nominee as this would have mean’t the title would be in their name and you could not get finance over the property.
Terryw
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If you think the growth has finished, it may still be better to keep it because of the yield, but if you think values could decline, maybe better to sell and buy elsewhere, or ivnest in a different area.
Terryw
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Sorry, I don’t understand what you are saying.
You are wrapping, yet onselling on the same day?
Terryw
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I know it is better to pay off your home loan asap, but i wouldn’t be too worried about doing it too fast at the exclusion of investing.
If it was me, I would borrow to invest first and use the extra cashflow to pay off the homeloan. eg. Something simple, if you could borrow another $100,000 secured on your home, invest this into something like a Eurofinance interest bearing securities at about 9%. You will make about 2% on your money which you could then plough back into your home loan. There are many ways you could even beat this.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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What are you goals? Do you want cashflow to retire immediately or build it up further by investing in high growth stuff, or a combo.
I would pay off any non deductible debt first, then get some investment property, using 20% deposits and borrowing the rest. Put some in shares, maybe margin lending, and keep about 10% for investing in high return risky stuff.Terryw
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Hi. What will you use as security for your loan? If the land is owned by the uncle, you won’t be able to get finance using this as security.
Terryw
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Hi again
I think it will be impossible for you to get approved by mortgage insurance. Due mainly to you being self employed overseas.
There are other lenders that may consider you at up to 95% LVR, but the interest rates are going to be high.
Terryw
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Karen
yes. it does happen, and can even be worse.
I actually don’t think you have much to go on, as the bank did give you formal approval before they changed their minds. And they had previously informed you that they would only lend to 70% in that area.
But, complaining may still get you somewhere so good luck.
Terryw
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Hello Dave
I think I know the units you are talking about. Beware, that they are very hard to sell, and there has been no capital growth there -ever. One of my friends bought one for about $100,000 about 6 years ago, she tried to sell it a few years ago and gave up.
There will be problems financing these as they are very small – less than 25 sq m. you are probably looking at around 60% LVR max with an interest rate of around 7%.
Terryw
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Hi Anthony
The trouble is not with the banks, it is with the mortgage insurers. There are only two in the whole of Aust. Generally mortgage insurers won’t touch overseas residents. I am not sure, but maybe you are an overseas resident for tax puroses, even tho living here???? If we can argue that you are a resident, then it may be possible. I’ll make some enquiries and get back to you.
Terryw
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If you sell shares in the property, you may still have to pay substantial stamp duty if the company is land rich. If in NSW, have a look at http://www.osr.nsw.gov.au
Other implications are, people worry about taking over a company as it could have debts/guarrantee/tax problems/other problems and they will inherit these.
If 3 investors are going in together, if may be better to use a unit trust with units held be each person’s discretionary trust. I beleive it is possible to transfer units without stamp duty. see http://www.chrisbatten.com.au
Terryw
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Sounds like you just have to keep comming up with deposits. Wrapping property helps as you get the cashflow and small deposits. So you wil have to just save like mad, reinvest all profits, wait for a few cashouts or take backs and/or find investors to supply deposits.
Terryw
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If you hold under a trust structure, any profits/gains could be distributed to low income earners who may pay little or no tax on the income/gains. This money could then be gifted back to you.
Terryw
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What he can do is buy the land, then get a mortgage. When he wants to construct, he then gets a construction loan with the same bank. It is not a second mortgage, but an increase in the first. Many banks will lend based on a % of the end value of the project or a % of the construction costs.
He must still have a good enouggh income to qualify.
Terryw
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I am no tax expert, but think there may be problems with borrowing money to make loan payments. If not structured correctly the interest on this borrowed money may be not claimable.
Terryw
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renaeg
Don’t be too impatient!
If your properties have no potential for capital growth, if may be better to sell them now, and reinvest into something better.
Otherwise, just keep saving for the deposit on the next ones.
Terryw
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you will have to setup your trust before you sign contracts. Trusts can minimise tax, but not risk. Trusts cost as little as $175 setup. http://www.cleardocs.com.au or http://www.lawcentral.com.au
You are probably after a Discretionary trust.Terryw
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Steamtrain
Having a trust would benefit in many ways:
– Allowing you to sell your property and yet still keep it, (like selling to the wife)
-Asset protection
-Tax minimisationI wasn’t suggesting your sell your PPOR to the trust, but that is another option too. I mean’t sell one or more of your rental properties to the trust, put the proceeds off your homeloan and borrow big for the purchase, converting non-deductible debt into deductible debt.
Terryw
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