Partnerships are not a good idea – in my opinion. You are best buying in one persons name, with a separate agreement drawn up. That way you can get the FHOG 4 times, and increase your borrowing capacity while decreasing risk.

Once you buy one each, you could then set up 4 different trusts – discretionary or Hybrid discretionary. Have one person as trustee for each trust/or director of the trustee company. all 4 could then be beneficiaries. When the loan is taken out only the director/trustee will be required to guarrantee it, leaving the borrowing capacities of the other 3 intact.

Terryw
Discover Home Loans
North Sydney
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And another point, most variable loans allow you to pay extra without penalty, so you may as well get IO and pay the principle if and when you chose.

Terryw
Discover Home Loans
North Sydney
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Hi

I think you mean Interest Only loan??

With IO loans, you pay off the interest monthly over 5 years (usually) and then after 5 years, you can either, take another period of IO or the loan will convert to principle and interest (PI) over 25 years.

The interest is calculated by the interest rate x the loan amount, divide by 12 to get a monthly figure – this could vary depending onthe number of days in the month.

Terryw
Discover Home Loans
North Sydney
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I think it is http://www.businesslawyer.com.au

Terryw
Discover Home Loans
North Sydney
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Yep. Nearly all lenders frown on wraps, with similar clauses in the loan contracts. Most wrappers get around this by not disclosing to the lenders. As long as things go smoothly, it is unlikely to come to notice.

Similar with lease options, most banks require their permission to be given if you are writing an option on a property that is being used as security.

Terryw
Discover Home Loans
North Sydney
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Hi Yack, I haven’t read Steve’s new book yet, but don’t think he promotes low growth rural properties. From his last book it looked like high growth positive cashflow properties in major rural towns.

Terryw
Discover Home Loans
North Sydney
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I heard of one case where prices had rsien substantially since contrustion began, so the company deliberately slowed down things so that they went over the sunset clause, enabling them to cancel the original contracts and resell the properties at a much higher price.

Terryw
Discover Home Loans
North Sydney
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Steven

That http://www.sjq.com.au/sjq/site.cfm is a good site. thanks.

Terryw
Discover Home Loans
North Sydney
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Many accountants have little knowledge of trusts and do not recommend them. Then again, many people have good intentions of buying many properties, but end up only getting one and then move onto something different. So I think your accountant may be suggesting you buy one or two and see how you go, if you still think you will buy more, then set up a trust at that stage for future properties.

Trusts can be cheap to run, and setup, so you might as well get it right from the beginning. Setup a trust, get a LOC on your PPOR, draw up a loan agreement and lend money to your trust which will then use this as deposits and borrow the rest.

Terryw
Discover Home Loans
North Sydney
[email protected]

My guess is by offering a high strike price. If a place is worth $600,000 as is, and you have the foresight to see it could be worth $1mil if you do x do it, then by offerinng $800,000 you are offering to pay more than market value you can probably get a cheaper option fee, and still go and make a huge profit.

Terryw
Discover Home Loans
North Sydney
[email protected]