Quantum Property Warrants – SMSF and Leverage

I’m aware of the use of SMSF and joint ventures with unit trusts as a way of using borrowings to invest in property, as is explained by Chris Batten on his website, http://www.chrisbatten.com.au.

I’m also aware of using SMSF (or other structures) to invest in property via private and property syndicates.

Now, I’v recently come across a product that is different to the above two investment strategies, called “Quantum Property Warrants”: see the website http://www.quantumwarrants.com.au.

The product is backed by an ATO product/tax ruling, though it expires in June 2008, and I’m not sure of the significance of this?

It seems in some ways almost too good to be true, offering a unique way of leveraging using a SMSF and ENORMOUS TAX BENEFITS – for example, from my limited understanding of it so far: the following could be tax deductible – deposit, stamp duty, loan costs, principle and interest repayments, all property expenses, depreciation – as well as this, there would minimal stamp duty and capital gains tax on sale, and it uses limited recourse financing,

I’m in the process of getting a product disclosure statement (PDS) to assess this further and in the meantime sending an e-mail to them to ask some questions. I am aware that the “John Hopkins Group”, http://www.johnhopkins.com.au, in Melbourne is now marketing the product in Melbourne for the first time.

From the information on the website I can see there pros and cons to using this product, but haven’t quite got my head around it yet.

If any of the experts on the forum here could have a look at the site and see what they think, it would be very helpful. Particularly the potential risks, downsides, suitablity to certain investors, “catch 22’s”. Especially those familiar with SMSF, tax, and structuring…

Regards,

GSJ

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