Hi Everyone,
I have recently entered in to a partnership with my partner and another couple. We have purchased a block of land which we intend to build units on early next year. I am after advice mainly relating to financial structure of the partnership. We will be seeing banks, financial advisors and attending seminars but the more info i can gather is helpful!
Bec
Speckles,
You say you have already entered into the partnership & bought the land – sounds like you’re really asking a bit late – you have a structure, rightly or wrongly, in place already.
So what do you have in place right now?
Cheers,
Aceyducey
Thanks for the response! We have taken out a basic land loan with Members Equity. We have used full cash deposits so as not to involve our existing property etc in to the partnership. I’m not sure of the best banking products to use. I have been dealing with ANZ previously and find them very unhelpful! Is there one way that is better to do it? A line of credit? Build one sell and then build two more to rent out? Should we set up a trust before we begin building? Just after some ideas. Any thoughts will be appreciated!
Thanks [smiling]
speckles,
1. if u set up a trust and transfet the land u will pay stamp duty on price of land again. (but better than transfering to a trust structure on completion of building).
I made the mistake of buying land under my name but decided to pay SD again & moved it to a hybrid discretionary trust structure. definite gains in the long run (CGT, neg gearing, etc)
2. getting a loan from a bank under a trust structure is difficult. only some banks/ brokers handle that.
3. if selling (under any structure) the gst will erode your margin. and CGT will kick in for the remaining $ (can be minimised under Trust structure)
Regards
Kattan
just my opinion; get professional advise
4.Bec,
The seriousness of the development finance issue is such that I have a specialist speak on the matter at my workshop. If you have already purchased the property, some things can’t be changed now. It is important to have the right structure or entity purchasing the property, for starters.
Lenders have pretty standard requirements… my checklist will give you a quick overview of these. Download it (for free) from my site (below).
Again, seek out a broker who SPECIALISES in development finance. If you’re stuck on that PM me for a recommendation or two.
Peter.
—
Peter Comben
http://www.smartpropertydevelopment.com.au
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