All Topics / Finance / Creative financing needed

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  • Profile photo of NRGNRG
    Member
    @nrg
    Join Date: 2004
    Post Count: 23

    I’m looking to purchase a property I can’t afford outright so I’m looking for flexibility from the seller and initial discussions show he’s interested.

    He’s a pensioner and he has inherited a house from his mum worth about $460,000. It needs a lot of work. Most of the value is in the land. The house is solid as a rock but the internal fittings are 50 years old, including a wood stove in the kitchen.

    If he sells it outright he loses his pension and all its priveleges (medical, etc.). He has no money and owes $20,000, wants a new car and wants to travel back to his homeland in Europe.

    I suggested a downpayment of say $50,000 and monthly payments thereafter (a seller wrap). The income test for pensions cuts off at $2,800/mth.

    Two problems (1) the lump-sum deposit would exceed the annual income test (2) the monthly payments could exceed $2,800/mth. Not sure how to get around these problems. Maybe there’s another way?

    Cheers
    Neil

    Profile photo of brahmsbrahms
    Participant
    @brahms
    Join Date: 2004
    Post Count: 485

    shudder…..shudder……
    why do i always get the shakes when i hear the words ‘creative financing’……

    shudder again…..

    cheers

    brahms

    If you don’t ask, the answer is no!!

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213

    I wonder how cnetrelink would look at a pensioner wrapping a proeprty. The ATO considers the sale to occur on exchange of contracts – even if paying in installments. You could lease option it off him also, but the rent would be over his threshold as well. a tough one.

    Terryw
    Discover Home Loans
    North Sydney
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    Profile photo of Nat RNat R
    Member
    @nat-r
    Join Date: 2004
    Post Count: 224

    Maybe look at buying an anuity or dsome other from of investment from one of the invesment managers for say $100k that is ‘assigned’ to him. He will hold that as the ‘deposit’ but it may not breach the $$$ amount he can recieve. Then you can make the mthly payments to him from then on.

    Profile photo of melbearmelbear
    Member
    @melbear
    Join Date: 2003
    Post Count: 2,429

    Neil, don’t know if the old guy (is he an old guy, or a different sort of pension?) would be interested, but in another thread on this forum on health care, the basic story was that ‘money talks’ when it comes to doctors and surgery etc.

    Don’t know offhand how much pensions are, but assuming it’s $2K a month – if you pay him a lump sum, plus $3.5K a month, that extra $1.5K plus his lump sum should surely cover any medical expenses he would otherwise get highly subsidised?

    Maybe just have a chat to him, and see what his real concerns are, and perhaps explain how extra cash could help him solve that problem…

    I would still look at seeing if you could bank finance as much as you could, and maybe get him to take a second mortgage, at x% interest?

    Cheers
    Mel

    Profile photo of ezy.home.loans23320ezy.home.loans23320
    Member
    @ezy.home.loans23320
    Join Date: 2003
    Post Count: 144

    to start you would need a good solicitor,
    maybe find out exactly how much he can earn before he loses his pension…its scary if you are old or sick and you think you might lose your one line of security……
    set up a payment system where the person selling can draw $2000p/month all the rest of the money stays in a Trust of some sort where all bills are talken out , hospital bills etc
    The money to be deposited $xxx the price of the house today.. you can pay into this account but can not draw from it , The house is yours , to do up or sell but you have a debt of $xxx price of the house which must be paid in full before the deeds are released . if the person dies before the debt is paid , the debt payments are given to who ever the owner nominates…..Just my thought
    EZY [buz2]

Viewing 6 posts - 1 through 6 (of 6 total)

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