I am 50 yrs old, live in S.A., am married with with a wife who presently earns about $30,000 p.a., have one sibling and have recently had to go on a Disability Support Pension because of a non life threatening physical condition.
Over the years I have paid off my house (worth about $200,000), have $120,000 in a “managed” superannuation fund and $380,000 in free cash (presently eroding away in an interest bearing bank deposit).
I have previously worked in a profession alied to the building industry, so I feel more comfortable in investing in the property market. Could anyone please advise on a good strategy w.r.t. the $380,000, presently “invested” as it matures in a few months time. Thanks for any help in this regard.Hi Johnny
I am sure you could be the return you are currently getting on your money.
With $380,000 in cash you could buy a lot of property. For example you could put down 20% deposits and borrow the rest. Maybe go for cashflow or a rundown place that you could rejuvenate? Get one and see how you go. (eg you could theoretically buy about 15 x $100,000 proprties)
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terryw for your quick response to my query.
Unfortunately in my original email I should have explained that I would need to get an immediate return of at least $15,000 p.a. gross income on my investment to presently supplement my wifes income and lasting up until she retires in about 5 years. Also, because I’m a 50 year old “newbie” I’m not sure of the way I should go about this. I have been to a few seminars conducted by the property gurus but have found that they’re only pushing a certain philosophy based on their end product. I need some honest, independent advice.Hi Johnny
You could get this sort of return by wrapping. Ona $100,000 property, you could make about $5000 per year profit, so you would need at least 3 properties wrapped to get $15,000. You would also get captial gains when they cashed you out.
Terryw
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
[
]Thanks again Terryw for your response.
The only thing I can see wrong with your last suggestion is that “Wraps are legal everywhere in Australia except South Australia” (according to an excerpt from this website under the Main Page – “Creative Solutions” – “Lease-Options” – “Where to next?” – “Wraps”).
Do you, or does anyone else, have any other ideas on how I can strategically get a $15,000 gross annuity, given the aforementioned criteria.
Kind Regards [] – Johnny.Hi Jonny
You mention that wraps are illegal in SA. Wraps are generally divided into 2 types. Those using an “Instalment Sales Contract” and those using a “Lease Option”. Unfortunately the governemnt of South Australia will not allow the use of “Instalment Sales Contacts”, so if you wish to wrap in SA you’ll have to use the Lease Option method.
There is a wealth of knowledge about wrapping in OZ on the Vendor Finance (Wraps) Association’s website at: http://www.financewraps.asn.au
However if you are simply looking to invest your $380,000 for a return of approx $57,000 per year (15%), I would consider becoming a Joint Venture Partner with one or a number of existing wrappers. Via this avenue the wrapper will usually get the loan on the property to be wrapped by using your money as the 20% deposit. Your investment is secured by the property and these wrappers will usually offer you 15% or, if you want a bit more risk, 50 – 50 on the profits over the life of the wrap.
Good luck.
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Hi Johnny,
Some options available to you are:
1. Convert your super to do it yourself super to receive a return of 17% per annum made up of 6% capital growth and 11-12% cash flow. This effectively doubles your super in 5 years.
You have $200,000 equity in your home which is enough to borrow more than you need if you had an income, so equity is not a problem.
2. The program PIA Pro shows that with using a wage structure of $30,000 (your wife’s income) and $15,000 pension, you could put $150,000 deposit on a $250,000 property which is selected by using highest capital gains as a pre requisite. You would receive $76 per week increasing to $102 a week at year 10. You could easily afford 2 properties. One could be sold to pay out the other on retirement. You also require these 2 properties to have a high yield. This option leaves you with $80,000 to be used as an emergency fund or for other investment streams.
3. invest in a similar structure as that used for super funds to maximise cash flow with capital gains as a secondary consideration. The building of an aged care facility is one of many boutique types of investment which fits these guidelines. This is a good area to be in due to the retirement of baby boomers where demand is expected to exceed supply. This will give a high return with low risk. The project could be a syndicated investment. These are more complex to set up. [] If you would like a copy of the PIA Pro report on the first senario please advise your fax number on the link below. Hope this helps.Regards,
Bryce Inglis
[email protected]
http://www.ipal.com.auThanks for your help Paul D. [
]Invest in 2nd mortgages. These can make you are return of up to 25% p/a.
You can also set up yor super do this, as a DIY fund.
Thanks for your help noddies and picja1 [
]
]Thanks again Terryw for your response.
The topic ‘HELP – Have Money but on a DSP ??????’ is closed to new replies.
