Hi All,
well I’m nearly finished the wraps course and am keen as can be to get cracking. I’ve begun sorting my finances out and have a few questions for the wise and weary among you.1 – I have a certain amount of equity to use as deposits for the first one or two properties, and borrowing against this will take me up pretty well to 90% of my loan amounts on my two current buy/hold properties. How can I progress further than this point with financiers from this point? Will I run into a serviceability problem or do wrap-specific financiers know how to handle this?
2 – I’ve read and heard that the best thing you can do to start is set yourself up as a company. Is a company or trust structure better and which is more tax effective? I wanted to get this sorted before I jump into the fray.
I’m in Brisbane Qld so if any of you folks are up this way and can point me in the right direction, i’d really appreciate it!
If you don’t wish to reply in this forum, then please feel free to email me at : [email protected]
Cheers to all! And if there are any organised get togethers up this way – let me know!
Cheers
Matt.Hi Matt,
I’ll have a go at answering your questions…
q1-funding
When you run out of your equity you need to fund future deposits / deals out of:
A. Your own money. That is you save a portion of your income to reinvest in deals.
B. Your +ve cashflow. Same as (A) above except it’s not your income that you save rather a portion of your profits that you reinvest
C. Using OPM – namely money or joint venture partners or alternatively look to do some creative financing wher ethe lender takes back a second mortgage to preserve your equity.
q2 – structuring
This is a complicated issue and not something that can be outlined once and for all as the correct structure depends largely on your circumstance.
In truth you can use an individual, p’ship, company, trust, super fund or combinations of these to invest with.
I suggest that you do a search on the forum using the word “structuring” and read more on this topic as I have answered several posts previously and written a lot of information on this topic.
Bottom line is that you need to weigh up what is at risk (asset protection and tax minimisation) and weigh it up with the cost (accounting and compliance) associated with setting up and maintaining a structure.
The great news is that I will shortly release a product that outlines a lot more information in this area soon. It comes with a 50 page workbook and an comprehensive audio CD too.
Stay tuned for more info…
Bye
Steve McKnight
Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
https://www.propertyinvesting.comSuccess comes from doing things differently
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