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Hi Guys

A twist on the LOC option is to get a interest only loan with a 100% offset capability.

The advantage of this method is a cheaper interest rate.

The down side is that they review this loan as the interest only component is for a fixed period.

As AD says it is very important that you set up the structure correctly.

Some of the things you need to consider are

a method by which people can exit the investment without detriment to the other parties.

what happens when one of the group becomes non financial (sickness death etc)

Basically contingencies and what if’s

Cheers

Cheers

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Hi ziz,
It’s amazing the ways around financing. Thanks for giving me contingencies to consider!
Cheers
Wellyboot []

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Hey Wellyboot,
Welcome to the forum …or as Bruce says….PI.com []

Just a thought as to what you guys shoulg set up… It really depends on the situation and the money split. You should speak to a solicitor to consider the four main approaches.
1. Form a company.
2. Set up a Unit Trust.
3. Do a Joint Venture.
4. Form a partnership.

All of these have pro’s and con’s and the best person to see would be the solicitor and or accoutant. It may seem like a lot of money but it will be more expensive if things go wrong.

As to LOC or not to LOC…….

It certainly brings the costs down if you uses your own money but it also means a lot fewer deals. I use the LOC for deposits through a broker. Another clever way people use LOC is to buy the place “cash” and then be able to negotiate a lot tougher. After purchase they then refinance the house and pull their money out.

Hope this all helps.

Enjoy
AD [:0)]

“A successful person is one who can lay a firm foundation with the bricks that others throw at him.”
-David Brink

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Many thanks Ad – hmmmm….plenty of food for thought there.
Best wishes
Wellyboot