- Originally posted by calvin@thirty4:
TO answer your question, Redwing, yes he does creat a new Pty Ltd for every purchase! Mind you he is a developer, and it seems to suit his urpose!
For every development he does he intends on keeping one or two units for himself. So perhaps that is the answer, he sells off most the assets once development is complete and then closes off the Pty Ltd?! L
ike I said, I haven’t got all the facts as yet. Until I do I’d suggest following Cata’s advice. I appologise if I led any-one astray!Thanks Calvin,
I just found it curious as to how you could put XYZ PTY LTD without it being in existence and how you could be sure that the name would be free.
I find it all interesting how other people work their deals, learning the hows and why’s from those actually “doing it” is alway a worthwhile exercise IMHO.
I’m just trying to work out if he sells one or two to himself or another Company he owns, or he keeps them in the original Company structure rather than close it down and the pro’s and con’s within that process.
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorOk, here is another hypothetical one; what if a trust was created last year or whenever, and the deed was written in such a way that appointor could be changed at a later date, thus effectively transferring control of the trust to a different entity.
If a contract was signed today and/or nominee, then the trust was transferred into the person’s control who signed the contract, then there should be no legal reason why the trust could not hold the property, am I right?
I realise that if you want a corporate trustee you may need to also buy a shelf company that was incorporated at a date before the exchange of contracts, since after all, it’s the trustee who will be on title.
Or, in a worst case, you may need to use a different company or yourself as trustee momentarily, then create a new company and change trustees after.
Any comments?
carl_vic Posted – 05/12/2005 : 15:25:03
Ok, here is another hypothetical one; what if a trust was created last year or whenever, and the deed was written in such a way that appointor could be changed at a later date, thus effectively transferring control of the trust to a different entity.Carl_vic, my understanding is that the appointor ios the original owner – the entity that controlls or owns the assets. As such if they change to some-one else it is like selling the asset. Like I said, this is my understanding!
redwing Posted – 05/12/2005 : 12:29:59
I’m just trying to work out if he sells one or two to himself or another Company he owns, or he keeps them in the original Company structure rather than close it down and the pro’s and con’s within that process.Redwing I’m not certain. I believe that the current ratio of development to ‘keepers’ is about one to five – you build five units and get to keep one for free.
This bloke I have just met is into large scale devlopments. Several Million Dollars +. I was glad that I have spent some time now getting into the Investing Mindframe and have been educating myself for two years now, because when we met, I was able to understand what it was he was doing. Now he didn’t put all his cards on the table, but he made a very good case. He offered me a piece of the cake, but I didn’t have the necessary loose change at hand! LOL.
Like you, I want to learn more about what other people are doing right now and how it is going because it will fasttrack my Investment path!Catch up with you soon! Got a garden to finish….
Cheers
C@34Our greatest weakness lies in giving up. The most certain way to succeed is to always try something one more time.
– Thomas EdisonHi All
Now i’m confused and thats a bit difficult for me.Dazzling how you lost money from the guy next door doesn’t sound right.
Its your choice to sell and if he’s the highest money and you know him/her I would be having a beer with them.
If you got out of it what YOU wanted, hows the loss, if there was a loss its not his/ her fault.
As for the question.
There is one time that nominee is usefull on the contract and that is if is an option in which case you can sell the option to a third party and the transaction can go thru as normal this is not the case with a company ,trust or individual.
There are lots of ways of skinning that cat when purchasing that you can use and they all have there reasons for uses heres a few.
In nsw
1. personal cheque to the value of 2.5% with a note on the back of the cheque that the vendor must notify you of the account it is to be deposited in prior to being deposited.( this gives you about 3 days( or more if you stretch it) and is to small as a deposit and once they come back to you, you have your trust and company set up and they return the cheque and if you have worked quickly you will have an account also setup in its name so the deposit can be issued out of that account.)2. option for 2 months, with a 1% caveat.
I like this one but vendor hate it as they don’t understand, If the site is worth it, it may become something others get involved in and hence the structure is setup to reflect this.3. signed agreement for vendor finance back to the value between the purchase price and the bank lend signed between the two parties on the finalisation of the negotiation, this is not a signed contract but an at arms lenght agreement that both parties have struck.
hence its a commercial agreement and once everything has been settled and alls ok
if things go wrong ie gazzumping all of the above have you in the driving seat ( with the caveat the property can’t be sold without major cost to the vendor)
4.negotiate with vendor and get them to the throw the land in on the project if a development site and jv.sorry but I haven’t put in throw your 10% down and sign the contract as one of the above always works.
As for the name on the contract.
first understand what you want to do with this property buy ,hold, sell, build, or flick.
next get under the skin of the vendor understand his motives for sale,1 move to better place,2 holiday home and whats to get out,3 smack addict and comes in with two russian guys with bats behind or 4 a little old lady going into a nursing home.
for no 1 option 4 or 3 he gets the sale and his money back in bits
2. use 3 or 2 as you can caveat the holiday home.
3. would be my favorite and talk to the russians using a go between( just incase they hit me) oh and this is the same for a bank manager/mortagee inpossetion both use different bats, I would use option 1 or 2 and if a bank lend from that bank, nice and simple.
4. the little old lady doesn’t want the money so let me look after it, so 3 is best or 2.after this you know who your dealing with, how your dealing with it and the structure you are using.
then you can proceed to the contract.
One last thing it takes 2 days two have a company and or trust drawn up and into cbd sydney.
and at the end of the day if you used number 1 they can’t deposit the cheque. rip up the contract once you have set up the structure and get them to issue a new contract ( you arn’t paying for the contract the vendor is) in the structures name.
The property can’t be sold as they are holding a cheque with a contract issued to you so who’s in the driving seat.
I used number 1, 2 months ago and held a property for 3 weeks untill I did my due diligencies.and the cheque couldn’t be cash I purchased and got both cheques back total 20k and purchased using harrington waters(four4) trust and company and got the lend from nab with nothing hold the property.
wont tell you the other agreement that was also put in place you will need to read my book called GROSSLY MISUNDERSTOOD and for people that can find spelling mistakes I am willing that an options on the book max one per person.here to help
If you want to get involved in some of the projects I’m involved in email to [email protected]Originally posted by carl_vic:Hi guys
Just a quick one; I intend to buy my next property in a trust structure which at this time has not been created. The right deal may show up at any time and require a contract to be signed urgently. Would I be right in saying that the trust must exist at the time the contracts are exchanged or else I cannot use the trust as a nominee on settlement?
Thanks,
CarlJust the other day I overheard a REA in WA tell a client that they could not put “or as nominee” on their contract.
However, as with Dazzlings post i have heard of people inserting this as they did not want the neighbours who were selling or a vendor to know who was actually buying the property.
Guess we all agee its best to have the trust established first though if you are going down that path youwill obviously want to use it at some stage so its not wasted money.
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorOriginally posted by carl_vic:Ok, here is another hypothetical one; what if a trust was created last year or whenever, and the deed was written in such a way that appointor could be changed at a later date, thus effectively transferring control of the trust to a different entity.
If a contract was signed today and/or nominee, then the trust was transferred into the person’s control who signed the contract, then there should be no legal reason why the trust could not hold the property, am I right?
I think what carl_vic is getting at is: Is there anyone out there that you can buy a pre-established trust from? Or more specifically, is there someone out there that will let you buy the appointorship of their unused trust that was created 12 months ago?
This could be handy in certain situations in terms of contract dates and not having your trust ready in time. Ofcourse it would need to be determined whether this is legal…does anyone know?
vexil Posted – 06/12/2005 : 16:02:07
I think what carl_vic is getting at is: Is there anyone out there that you can buy a pre-established trust from? Or more specifically, is there someone out there that will let you buy the appointorship of their unused trust that was created 12 months ago?I’d be a bit careful about this. What if the previous owner has some other “left-over” problems associated with that Trust?!
Our Family had the two Trust structure (one doing the business and the second owning all the assets). Once we finished trading and all things were settled, I thought what a beauty, I’ll grab that and then I don’t have to worry about the costs of establishing a new trust! You Ripper, what a bargain.
Then our accountant (at the time) mentioned that if there are any liabilities left over from that trusts trading days that I might cop them and then be liable for them……..and the ‘beauty factor’ tipped right out the door.I’d check that out before I’d buy some-one elses Trust! Not to mention that different Trusts are set up differently and their trust may not suit you.
I don’t want to throw sticks and stones – I just don’t want you to get screwed over! Not a nice feeling, I can vouch for that! [buz2]
Cheers
C@34Our greatest weakness lies in giving up. The most certain way to succeed is to always try something one more time.
– Thomas Edisonhi dazzling
To put it very simply its not legal but there are alot of things that are done that walk that very thin line and I’m not one to recommend something that is illegal and am not saying that it is a document drawn up by an accountant that is only registered when it comes into force not when it was drawn up but is dated when it was drawn up.
there are companies and trusts that are available that are clean skins that are 4,5,6,7 years old and if you go looking for them get one in a similar industry that you trade in as they carry any losses up to 7 years as long as they are in the industry that you tradin.
check with an accountant before doing anything on this front.
This is not advice so don’t pretend it ishere to help
If you want to get involved in some of the projects I’m involved in email to [email protected]Be careful with this one GR. ATO will not be happy with you (or anyone else) if this is done any you are audited.
Not worth the risk IMOP.
CATA
Asset Protection Specialist
[email protected]hi dazzlingWell hello to you too grossy…hey matey…don’t confuse me with vexil…???
sorry I only looked at the face.
are you around perth on the 15th or 16th this month.
add to my post perthees wantedhere to help
If you want to get involved in some of the projects I’m involved in email to [email protected]One of the legal experts can sort out whether I am on the right track here..
Despite most peoples belief ‘Title’ and ‘legal ownership’ are not strictly the same thing. When the contracts are signed and accepted you have a interest in the property, as an owner, even though you have not paid yet.
So you can’t sign the contract then run off and set up the trust before settlement. Here in Vic the SRO will hit you with a bill for double stamp duty if you try it.
The ATO could even have a look at you under Part IVa tax avoidance provisions if they deem you bought the property and then onsold it into a trust for the intent of avoiding tax.
Maybe the developer in WA is doing it differently as he may not sign the contract until the trust exists, although he knows the offer is accepted.
Any developer with a good accountant/lawyer will always setup a new company and trust for each new development project. At the end of the development they leave the trust holding no assets. If they want to keep a few apartments they transfer them to another holding entity to minimise lawsuits should something go wrong.
There is a story of a developer in Tasmania who didn’t do this and kept using the same trust to build and hold apartments. After a number of years one of the buildings developed serious problems and the new owners collectively sued him and as he had plenty of assets – he was cleaned out. Whoops.
Hope I am on the right track.
GregTrust property is said to be legally owned by the trustee, with the beneficial or equitable ownership lying with the trust’s beneficiaries. The trust is not technically a separate legal entity, and as such cannot own property on its own. Hence, all property (including real property) is owned in the name of the trustee – whether an individual trustee or a trustee company. Accordingly, the name on a property’s certificate of title will be that of the trustee’s (with no mention of the trust). The trustee should record the fact it is holding the property on trust and place such a record (e.g. trustee company minutes) in the trust register.
It is a semantic division which the law adopts: The trustee owns the trust assets in name only – the benefit of those assets (enjoyment of them) is the sole exclusive right of the beneficiaries of the trust. Hence, if the trustee is sued in a personal capacity (unrelated to management of trust
assets) the claimant has no right to the trust property, as the trustee does not have ‘full’ ownership of this property.CATA
Asset Protection Specialist
[email protected]hi cata
yes I agree hence the you will open a pandora’s box not only with the ato as you are moving towards asic and company legislation and thats why I have said it is a grey area And me for one, even thou I know about it wouldn’t recommend it there are alot of easier ways.
one is set up before looking.
It helps to know what is out there legal and illegal and the line inbetween
“with knowledge comes strenght” mao, he also said “power comes out of the barrel of a gun” so use knowledge wisely or it may be a pen not a gun that bring you down.
go to loan rangershere to help
If you want to get involved in some of the projects I’m involved in email to [email protected]What about this then; Say the company that is to be the trustee existed before the exchange however the trust did not. The contracts are signed either in the company name, or ‘and/or nominee’. Between the exchange and settlement a trust is created with the company as trustee. At settlement the appropriate paperwork is done related to the property being held in trust. Would this be ok?
Otherwise another option may be to buy an older, clean, ‘shelf’ unit trust of some firm, I’m sure there has to be somebody stock-piling these.. In an absolute worst case scenario perhaps this shelf trust could keep it’s original trustee through settlement and then change trustee to ABC P/L created whenever. This is obviously subject to cooperation by the firm supplying the trust, I think it would take more than kind words to make that happen.. But if it avoids double stamp duty on a 500k property there is a bit of a margin to play with.
Your thoughts?
If the property your looking at costs 500k, why not just put up the 2 g’s for a pty ltd trust? Or is this more for educational sake?
-Thomas
“More Time To Snowboard”
hi nazzysmith0153
for the same reason you don’t just buy the bricks and concrete and start building a block of flats without a da/cc or the foundations in place because yes it might be ok but is going to be very expensive to rectify later if constructed wrong its better to do your foundation correct from the start and you can’t do that if you don’t know if your building a house, a block of units or a complete village.
first decide what your doing and then build the structure for that purpose.here to help
If you want to get involved in some of the projects I’m involved in email to [email protected]Originally posted by grossrealisation:first decide what your doing and then build the structure for that purpose.
This is one of the best quotes I have seen on PI.com
CATA
Asset Protection Specialist
[email protected]Originally posted by carl_vic:What about this then; Say the company that is to be the trustee existed before the exchange however the trust did not. The contracts are signed either in the company name, or ‘and/or nominee’. Between the exchange and settlement a trust is created with the company as trustee. At settlement the appropriate paperwork is done related to the property being held in trust. Would this be ok?
I think you still have a problem with this idea in that the ‘Duties Stamp’ from the SRO will post date the contract you have signed.
A trust can exist without the deed being stamped by the SRO, but if it acquires property and then you take the deed in for stamping they will hit you with duty again for the current value of dutiable assets held in the trust.
Hope that makes sense,
GregA Trust Deed can exist without paying stamp duty
(no stamp duty in QLD) but if it is not settled then it is not active and can’t be used(except QLD).Hence the double stamp duty.
CATA
Asset Protection Specialist
[email protected]
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