My husband & myself are in our middle 50’s, and unfortunately had to declare Bankruptcy due to a number of reasons…some our fault…some not! Anyhow, wer’e becoming discharged in Jan ’05, and desperately want to make up for this disaster and know we have only a relatively short time to do that. My husband is now a Building Surveyor (with our local council), building Inspector (was a Registered Builder), so knows a great deal about this area (Building etc). We are very keen to use this skill and have been studying up on Steve’s ideas (and everyone else’s …via the Forum), and realise that we need to now build up our credit rating, save, more sacrifice, different ways of thinking finance. (If not anything else…we have learnt our lessons in regard to this scene!!)
Our questions are……Our daughter & her partner work in the Northwest of our state (WA), earning big money, and are paying off an ocean side 14 acre block at Exmouth, (which they also paid huge dollars for). They are now looking at ways to offset their huge tax payments (using equity from their block), and I have been trying to encourage them to invest in a property down here, that myself & my husband could rent off them. We live in a huge growth area, which is also a beautiful part of the Southwest of WA called Busselton, and come across quite a number of excellent property possibilities.) I would like to go the next step on to maybe a Lease/option? Just not sure how to broach this with them, as they are quite protective of their finances, and will need something with a definite structure placed before them. Is this the only way we can get a start?? We feel so badly frustrated that we cannot move with our PI challenges. Any ideas anyone…please???? Cheers WendyBW Butcher
Wendy,
Welcome to the forum!
I’m sure you’ll find a wealth of information here to help you and your husband turn your situation around. Its certainly possible and you’ve taken the correct first step to get on the correct path.
I like the idea of renting from your daughter. It should be a win/win as she gets a reliable tennant [biggrin] and you get to build up a good credit profile by demonstrating fiscal responsibility in regular rent payments.
There’s a lot of help here that I’m sure will be forthcoming from better than I.
Welcome again,
Michael.Maybe you could get some sort of proposal to her showing how much the property you would be interested in renting off her would cost, what rates, land tax etc they would have to pay. And of course you would need to include the amount of rent you would pay to her.
Just make sure that you pay market rent to her otherwise the ATO can get quite narky about this when she goes to claim all of the tax deductions.
Thanks,
LuckyoneThanks for your thoughts about our situation. If anyone has anyone else has anything to add to this, we’d be grateful.
WendyBW Butcher
Some lenders will look at assisting you depending on your current status (if you are looking ot borrow again)on bankruptcy.
On the home front – Your daughter and partner are also trying to get ahead without offering any discounted rents/financial help, and may need to get the best return in the market – so then there may no benefit (to either of you).
However you might want to consider JV’ing with them on a property, and have a formal agreement in place to cover off all potential issues as this saves the potential heartbreak in dealing with family matters in business.Chris Durman
Commercial Capital Finance Pty Ltd
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If you wanted to do a lease option, that could help you out by letting you gain access to equity while waiting for your credit problems to diminish. You can get a loan as soon as you are discharge, but the interest rates will be high, the longer you wait the lower they will get. So after renting for a few years from your daughter, you will be able to cash her out and buy a house that should be worth much more than you are paying for (at that stage). You daughter would benefit as she would get positve cashflow and a small capital gain.
Terryw
Discover Home Loans
Mortgage Broker
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Terry,
Your thoughts about possiblity of Lease/Option from my daughter re-inforce mine. I am now in need of some substantial info in regard to Lease/Options so that I can present her with something to study up on and help her with her ultimate decision. I only know basic details about L/O’s, and both myself & my daughter are the types that need to fully investigate things first.
So…where to from here? Would Rick Otton be able to help me, and how do I contact him? What about yourself Terry or whomever out there , I would very much appreciate some more substantial details please. Cheers, WendybW Butcher
There’s not much to them. Just agree on a rent and a price, and how long you want the option for. go to a solicitor and he will draw up an option.
eg. place is worth say $200,000. You agree with buy it for $240,000 within 5 years. normal rent is $200pw, but you agree t pay $300 per week and will do all repairs etc. You pay her $4000 for the option fee – which can be non refundable, and come off the purchase price.
After 3 years, it may be worth $260,000. You can then get a loan and pay her out paying only $236,000 (since you paid a $4000 option). in 5 years, it may be worth $300,000, but you will still only pay $236,000.
You should be able to get a loan based on value, eg. 80% of $300,000 = $240,000 just what you need.
She gets a small capital gain and extra rent, you get instant equity, and your back in business.
But since you are family, may you don’t need to go thru a solicitor to do all this, but then again, maybe you should incase there are disagreements.
Terryw
Discover Home Loans
Mortgage Broker
Click below to email meTerryw | 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
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