I’ve recently set up a company trust to start putting my investment properties/assets into.I spoke with a mortgage broker the other day to set up a loan in the new company name but he said in order to do that I would have to provide the bank with trading figures for the last two years. Well obviously I don’t have that as I’ve only just set the thing up.
My question is, how do I purchase the property in the name of the company/trust but take out the loan in my name as I have the means to make the repayments?
thanks in advance
BB
Well Betty Blockbuster…
From my experience it is really complicated.
There are alot of issues involved with setting up a company and then setting up a trust under the company. I set up a company with a few colleagues of mine that are willing to buy properties with me. There are not many property accountants or lawyers that have much knowledge with it. But when they do…. they usually charge you alot of money for their advise and structures of a company.I think it is best for you to see an accountant that’s specializes in property investments. You know someone like Steve and Dave I guess [
]It really depends on what you want to achive I guess.
Thats my opinion.
Betty,
You can get the loan in the trust or company loan.
As the entity hasn’t got figures for two years it cannot stand up alone.
You or other trust members can go guarantor on the loan. Quite simple really. Another idea is you go co-borrower.
I think you need a smarter broker.
Cheers,
Simon Macks
Mortgage Hunter
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
Hi Betty,
As Mortgage Hunter said, it is quite easy.
You shouldn’t have to provide figures for the company. Simply your own taxation returns. As he said, you will have to guarantee the loan.
By the way, we nearly missed out on 2 good properties, because we bought in a Trust name, and our Trust Deed wasn’t ready. Be careful.
Talk to you soon,
Del [
]Simon’s got the right of it: you need a smarter or better informed broker. As you can see from the advice previously posted, this is what the broker should have come up with for you.
Dave and Steve’s story of wanting to borrow $100,000 from the bank went along the lines of the two bank lenders requesting that Dave and Steve deposit $100K in the bank and then they will lend them the money.
Dave summed it up, something like: “You mean to tell me you’ll lend us the money if we deposit the same amount in your bank? I don’t suppose you ‘sell’ many of these loans, do you?”
Just shows that dealing with the wrong people can be a huge barrier to reaching your goals. You’re not here to educate someone else who, supposedly, is competent in their industry, otherwise we’d all be doing it ourselves with no need of a professional.
You’ve created a trust and P/L as trustee, which is good, but my concern is you don’t seem to know how to go further with it. You got the concepts right, but not the practical side of creating and running the structure you want.
Please, I’m not having a go at you, I just want to point out if “how do I purchase the property in the name of the company/trust?” is a hurdle, what others are there that you don’t know about.
It’s not a conceptual hurdle, you obviously understand it. It’s a practical hurdle, a real one, and until you’ve got in place professional people who can help you through the process or the transaction, it will be a struggle.
As you can see, if you’re not sure about the how to go about it and you work with “professionals” who have no idea, your goals will not be reached. You’ll flounder.
My suggestion is find both a broker and an accountant who can work with you on this.
Take the ideas presented here when you interview these people. If they are not coming up with similar ideas, you need to go somewhere else.
Steve has a .pdf on the site somewhere about what to ask when interviewing an accountant.
Michael
That’s right, BB, you need the right people for the job.
I have an Oz P/L as trustee for an Oz discretionary trust. I inquired about the chance of getting a loan from a NZ banking institution. The reason I asked is that some people on this site seemed to think it was way too difficult. So did I at that stage but I thought it couldn’t hurt to ask around. So I asked a NZ broker.
My question: “Is it possible for an Oz P/L trust structure to be considered for a NZ loan?”
His answer: “Oh yeah, Of course! As long as you go guarantor, it just depends on how experienced the lending institution’s administrator is! If he/she isn’t experienced they will knock you back, so we go to the highest admin to get it done”[:0)] I have since gotten pre-approval.So, there you go BB, find the right people and it’s a goer. But as some people have said already, you seem (like me[
]) not so experienced with all this so increase your knowledge base. Learn as much as you can about the whole industry of investing in IP’s from the Banks requirements and procedure to the agent’s. Study a little bit about contracts and your rights with regard to them. Study Study Study so when it comes time to talk to an advisor you will know what you are talking about and you will know if they know what they are talking about[]. Otherwise you could be in store for some big disappointments[].A great start is to search the threads on this forum… very helpful (and the ATO/OSR/related websites). Also check out Sooshie’s links thread. You’ll be surprised what you can learn with a little time and effort in the http://WWW.[
] Learn, then act.Good luck with it all, and happy journey.
Regards,
Hungry[]Thanks for the input everyone. Looking forward to returning the favor.
BB[]
]
]
]) not so experienced with all this so increase your knowledge base. Learn as much as you can about the whole industry of investing in IP’s from the Banks requirements and procedure to the agent’s. Study a little bit about contracts and your rights with regard to them. Study Study Study so when it comes time to talk to an advisor you will know what you are talking about and you will know if they know what they are talking about[
]. Otherwise you could be in store for some big disappointments[
].The topic ‘Company Trusts’ is closed to new replies.
