All Topics / The Treasure Chest / WAYNE’S DILEMA

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  • Profile photo of LynchyLynchy
    Member
    @lynchy
    Join Date: 2003
    Post Count: 12

    Please help,
    I am in desperate need of some good advice.
    I am married with two children,have my own business & have four properties,three as investments.The problem is we have $250000 mortgage on the house we live.It’s costing us more than $400 a week.The other properties are just positive cash flow of $2000 per year.One is unencumbered but there but there is a$240000 owing on the other two.My wife is not working but will hopefully be in a year.We have a net worth of about $655000.We would love to have a passive income one day but we’ve been gazumped in Queensland twice & am now finding it hard to get finance,except a low doc loan,because of my income,less than $40000 per year.All three investment properties have appreciated lately.With two young kids we are only just paying the bills which is putting us under stress.We would love to find a way to keep all the properties as they are in areas of good capital growth & one is a development site.We have made mistakes in the past but would like to do what Steve & Dave have done.We would be thankful & appreciative of any help someone might give us.Thanks Wayne.

    Profile photo of HomeLoanGuyHomeLoanGuy
    Member
    @homeloanguy
    Join Date: 2003
    Post Count: 26

    Hi Wayne,

    I hear this type of dilema all the time in my work as a mortgage broker. May I first suggest that you have a good look at “Simply Budgets”, their website is http://www.simplybudgets.com, purchase the package (about $70), and first work out where the money is going. This alone will be a big step in the right direction.

    Secondly, establish a relationship with a mortgage broker you are comfortable with. Have a good look at many of the postings to this forum, there’s a few here willing to help (including myself).

    Whilst you may have a Lo-Doc loan now, there are some Lo-Docs that decrease in interest rate over 2 and 3 years for perfect repayments, so these are becoming good value.

    Cheers!!!

    Gary Young
    Home Loan Connexion
    Mobile 0407 64 66 32
    Fax +61 7 4636 4841
    email [email protected]

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024

    Dear Lynchy

    Dont dispare. Sounds to me like you have started up with a good asset base and some sound income generating properties.If you need to be pointed in the right direction for a positive cash flow property we would be happy to assist.
    I can assure you I have many client’s who would love to be in your position. Always happy to give you a general overview.

    Cheers Richard
    [email protected]

    There is no such thing as a problem.
    Just a solution waiting to be found

    Richard Taylor | Australia's leading private lender

    Profile photo of Mortgage HunterMortgage Hunter
    Participant
    @mortgage-hunter
    Join Date: 2003
    Post Count: 3,781

    Lynchy,

    You must be aware that your debt and equities are in the wrong places for tax effectiveness.

    Ideally you need to be living in the property that is unencumbered….but that probably isn’t practical.

    One suggestion is to transfer ownership of the unencumbered property to either a spouse or to a trust and take out a 100% loan on it which you use to pay out your home. This tidies up deductability. But it will be a CGT event and incur Stamp duty so only you and your accountant can decide if it is a solution worth considering.

    Alternatively sell the unencumbered property and place the proceeds in your home loan. Then repurchase using 100% debt.

    There are also LODOC loans available that are at standard market rates of 6.47%.

    I hope you can find a solution without having to sell.

    Simon Macks
    Mortgage Hunter
    [email protected]
    0425 228 985

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