In NSW you will have to pay land tax on all property held in a trust (and other states?) – ie you don’t have any tax free threshold. So you will be paying extra tax there, but may be saving tax elsewhere. I think the benefits outweigh the negatives.

Terryw
Discover Home Loans
North Sydney
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There are a large number of ways you could structure LOs.

eg charge them $50 pw week extra rent and then give the tenant a discount onmarket value whne they purchase. it could be a dollar value ie double teh extra rent they paid as a discount, or a percentage value discount.

There are other examples in Steve’s book.

Terryw
Discover Home Loans
North Sydney
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Bid, it is allowable as you are borrowing money to buy income producing units in the hybrid trust. So you can claim the interest on this money against your personal tax return.

see http://www.chrisbatten.com.au for some details.

Terryw
Discover Home Loans
North Sydney
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Mortgage brokers often come across clients about to be foreclosen upon (ie the owners looking for a way out). If you get in quick you could make an offer to the owner before they are foreclosed on. Once the bank gets hold of the property, they usually go to auction – as their can be no (or less) arguements about them selling it at a fair market price. So as Derek said, they may not always be value for money.

Terryw
Discover Home Loans
North Sydney
[email protected]

I would start the eviction process asap. Read up on the rules and process for your state (look for the tenants union site – some good info for tenants, but you will also find this useful). Maybe you could get your agent to send them a notice to vacate (do it all properly), this may shock them enough to bring them up to date.

Terryw
Discover Home Loans
North Sydney
[email protected]

Hi

I don’t really understand what you mean by ‘wholesale’. If you do as described how will the origianl owner make any money?

Terryw
Discover Home Loans
North Sydney
[email protected]

Do you have a mortgage on your home? If so, maybe you should consider selling and paying profit into your home mortgage and then borrowing against that to invest.

Terryw
Discover Home Loans
North Sydney
[email protected]

Hi Yack

Yes, Just off the top of my head, nearly all low docs have high exit fees – except maybe ANZ (60% LVR tho).

The exit fees on RAMS would have been approx 1.5% of the original loan amount in first 2 years plus $295. eg on a $200,000 loan this would be $3295.

It is best to ask up the broker up front what the fees will be. generally the low the interest rate the higher the exit fees – its a trade off.

Terryw
Discover Home Loans
North Sydney
[email protected]

Have a look at these two sites:
http://www.chrisbatten.com.au
http://www.mintgroup.com.au

Terryw
Discover Home Loans
North Sydney
[email protected]

Hi

In myst situation, I have just lend money to the trust at the same interest rate that the LOC charges me. So they cancel each other out. ie the trust is paying me $6000 interest on a loan and I am paying $6000 interest to the bank – net positon is nil.

You should draw up a legal contract for this, in case the ATO comes looking.

Also be aware of the asset protection angles as well. eg If you are sued and your trust owes you money, then the creditors can call this loan in.

Terryw
Discover Home Loans
North Sydney
[email protected]