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I am getting increasingly concerned about people buying inferior properties just because they are producing positive cashflow. I would only go for properties with good potential for capital growth.
Terryw
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Hi Tom
I’m not really sure what you mean, but you cannot use a wrapped property as additional security. ie you cannot cross securitise a wrapped property. So you will need a 20% cash deposit for the next one. (Or you could use another unwrapped property as additional security).
Terryw
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You will probably need a different structure in each country you invest in. I am interested in investing in Asia too, where are you looking at?
Terryw
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ajgebhard
I wouldn’t say asset protection is only of concern to business owners.
Other advantages of trusts include:
– taxation, trusts can save tax and claim things that an individual can’t
– Estate Planning. Passing assets on via a trust can be easier and cheaper with possible CGT and stamp duty savings.Terryw
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Bigben
Watch out when ringing the ATO. If you ring back and ask the same question 3 times, you may get 3 different answers!
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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I agree with Pete, it is not income and I can’t see any lender regarding it as income. Even if you were receiving interest, it is still unlikely that they will take it into account for serviceability. This is bacause, you could simply take it out of your account at anytime.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Print out a few of the posts made by Julia on this forum. That should help.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
These are trusts established offshore, usually with the intention of hiding assets or income, often in tax havens. Do a search on google for ‘tax haven’ and you will find a lot of stuff.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
unless they are on title, it will be difficult – third party guarrantees.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
What happens when you lend him the money and he just drives off into the sunset?
It is very hard to get bank finance for these homes as they can be easily moved. So you wll have the same risk, you will also find it very hard to finance and will have to pay for most of it in cash, making it a low return. And what if he defaults? you will have to take back a second hand transportable which may have dropped in value.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Pete, your spot on. I’ve ‘refinanced’ two wrap clients with the same bank (as a broker, not a wraper). The first time, they didn’t know what to make of it, and took it a s a refiance, teh second time, they would not consider it a refinance but as a purchase and would therefore only lend on the contract price of 18 months ago and not on current value.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Don’t do it!
I sold a good home about 3 years ago to ‘wrap’. If i had held onto the bloddy thing I would be rich now. Wraps only produce a low income for the rist and work involed and you don’t get much of the capital gains. Growth makes you rich, cashflow doesn’t. Cashflow helps you to survive, but not get rich.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I don’t invest in NZ, and don’t know much about tax there, but Wouldn’t you have to declare the income in Australia anyway if it was in your own name? A Trust may give more flexibility in distributing it to the lowest tax paying beneficiary, or even to a company in NZ and leaving it there. And what are the costs to transfer it to a trust – you may have to pay CGT here.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Try describing wraps as ‘installment contracts’ and see how you go.
http://www.mintgroup.com.au Bruce whiting is an Sydney accountant that understands wraps
http://www.businesslawyer.com.au Anthony Cordato is a Sydney Lawyer that understands them too.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
resiwealth – I’ve learn’t my lesson.
Only a fool learns from their own mistakes, a wise person learns from the mistakes of others.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
resiwealth
Sometimes wraps can be much cheaper than banks, and they are much easier to qualify for. eg. for a 90% loan with GE the rate would be around 10.65% for someone with a minor credit problem, (major problems wouldn’t even be looked at) and they still have to come up with a 10% deposit. Most wraps would be 8-9% with often a smaller deposit.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Similar to residential. It varies alot, with higher interest rates and lower LVRs – No LMI available, max LVR around 70%, can go to 80% at higher rates. valuations are harder to do, cost more and can vary a lot. very hard to get commerical finance in non city areas.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I too wouldn’t sell such a good asset. Use the equity if you wish to invest.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
I also have wrapped to someone on a disability pension. It is also a long term thing with a quick refinance very unlikely. My ‘tenant’ has been behind in the rent, and it would be very hard for me to kick her out as I sympathise with her. I could get tough and legally do it, but…
That is why I would never do it again.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Just think of it as a purchase with a very long settlement, with the purchaser given permission to live in the house during settlement if they pay in installments.
Terryw
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[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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