Forum Replies Created
Well its been over a week now since i got the old lawyer to type up a quick letter and post the cheque for the original quoted amount of $4400. No reply yet. Ill wait another month i think i can say its all clear. It was a nice strong letter.
what structure did you do the development in ? company, trust, personal name ?
If you were starting out trying to research how to do a reno successfully. I would try for a 2nd hand copy of dean and elises renovation guide.
a couple books throw in
start small, cheap house, inexpensive reno. Don't tackle something that is completely out of your depth If you are absolutely green.
and you wouldn't get into the reno fullstop if you worried about 2 months down the track, what exactly are you worried about?
Well I thought a agreement was made.
they came out looked at the job. Said it would cost between 3.5-4k I said that's ok we shook hands. They started work 2 days later. If the job changed or was more difficult I would expected to be contacted, ie we have hit rock it's gonna cost a extra 1k I would then say yes or no.
The quote was for plumbing. A new sewer drain to be installed.
The materials used where 20-22m of 100mm poly pipe.
4 y junctions, 2 corners, 1 head vent, 4 rubber joiners. 2 ip covers.
these materials you can get retail for under $400-500. So I was a bit shocked with materials 2.3k
and labour. Wow I should of been a plumber. $88 a hour. – $704 for each worker per day.
First day there was 1 plumber, 1 apprentice and 1 digger operator.
2nd day was the same and 3rd day there was just one guy.
Pretty unbelievable really just excessive and pretty unhappy with it
And you get to keep the paint sprayer. For next time
Airless paint sprayers online for like $400.
Spring white paint at bunnings /masters -$70 each, 3 rooms prob need 3x 15L tins. That's $210. (They can tint this paint also)
Blur painters tape, gafe tape and builders film to cover windows floors anything else, $150.
Total $760.
could spend 4-5 hours with good prep.
1-2 hours spraying
1 to Pack up after.
m
extras money and time could include. If you are doing a different color on wall to ceiling. Cutting in
If your walls are new, old or flaking and require a primer,
primer about $100 a 15L
would only need one coat.
If you are buying the property outright in cash. Why do you need a loan?
If you have been self employed for 2 years there should be no problem getting a loan.
some banks will also accept 1 year self employed
It depends if you then repeat the process again and again In business like fashion.
1st time your ok with the CGT free
2nd time you would prob be ok as well.
but if you've lived in 3 houses and renovated, sold and claimed the PPOR CGT exemption in 3 house in a year they would prob say you are in the business of renovating.
That's what I was trying to identify with before . Investing your smsf cash into unit trust of a reputable and reliable 3rd party developer/builder. You still get a slice of the pie. And for alot less effort and also a lot less risk of not completing the development due to funding difficulties. Because as freckle said investors provide seed capital rather then being debt captial from the banks..
You would be able to put your own cash and smsf cash into a unit trust as that would be a ungeared unit trust. You would not be able to put money into a unit trust and then further gear it via borrowings to be a geared unit trust as that breaks the smsf rules. You could only invest your smsf funds into a geared development if you use an independent 3rd party. You would need to get a builder or developer on board.
Get some advice from Richard Taylor (qlds007) as he has done similar in his smsf.
I think the bank borrowings would be the hardest part. Borrowing ie for construction.
I thought it had to be a independent 3rd party.
Ie your brother could contribute funds to by the land component of a development, whilst you use your income from your job/business to finance the construction and enter into a JV with your brothers unit trust (the smsf owning the units)
http://www.cavendishsuper.com.au/documents/Technical%20Bulletin/CavendishTechnicalUpdateSep05.pdf
This makes for some good reading
Is there A reason why you suggested 50:50 as the ratio of TIC or was it just a example.
Operating as a business is a bit of grey area isn't it. For example you might subdivide and sell both house and land to move onto something else. When's the point when it stops becoming a realization of a asset and starts becoming a business?. What if your smsf investment strategy was to do this once every 10 years.
What did you think about say starting off as units of a unit trust (ungeared). Using the tax concessions to salary sacrifice into smsf and buying more units of the unit trust. Obviously purchasing the units owned by personal name/trust by the smsf at a time when it maybe didnt hold any assets.
Well I was thinking it would have to be a contribution not a loan. Because the loan even from myself would mean that any property with a loan in smsf has to be a single asset etc. As after the contribution the smsf could purchase subdivide entirely with cash.
I know i posted this on another post but as this is also similar i thought i would pose the question on here as well to see the responses
How do the ato treat SMSF buying a property outright in cash and subdividing. ie (corner block). No borrowings at all.
Is this allowed?
Or for example
making a one off contribution of 150,000 (non cons limit 2012/2013), the contribution would come from a LOC against another asset not owned by smsf. total funds in cash then used to buy and subdivide a property whilst renting existing house
Or
Taking a LOC (approximately 150k) against another asset not owned by smsf and creating a ungeared unit trust.
Then making concessional contributions each year to slowly purchase those units off the individual thus repaying the LOC but after tax of 15 % concession.
and i guess finally do you have any advice on is it possible to get a limited recourse loan on a property that has been owned outright in a Superfund. Or can this only be done at the time of purchase.
How do the ato treat SMSF buying a property outright in cash and subdividing. ie (corner block). No borrowings at all.
Is this allowed?
Or for example
making a one off contribution of 150,000 (non cons limit 2012/2013), the contribution would come from a LOC against another asset not owned by smsf. total funds in cash then used to buy and subdivide a property whilst renting existing house
Or
Taking a LOC (approximately 150k) against another asset not owned by smsf and creating a ungeared unit trust.
Then making concessional contributions each year to slowly purchase those units off the individual thus repaying the LOC but after tax of 15 % concession.
and i guess finally do you have any advice on is it possible to get a limited recourse loan on a property that has been owned outright in a Superfund. Or can this only be done at the time of purchase.
Would this be a ok setup to buy a house and do a subdivision on.
tennants in common superfund owes 80 percent – personal name or family trust owns 20 percent
Property purchase 420
20k stamp duty approx
Superfund pays cash 350
personal contribution of 90k. (Borrowed via LOC against a different asset held in personal name) LOC limit 150k
Buys property rents out for year.
Does a subdivision on the property approx 30k fees paid for via LOC.
