question for loan structuring

Hi Viral,

This sounds like a question for your accountant, unfortunately a partnership is not a partnership like a trust is not a trust. There are many variations on these and each has their own lending and taxation implications.

I’m currently involved in a series of joint ventures with family members, we’ve structured different projects differently based on what our goals are within that project. For example, our first project was set-up as 3 names on the title of the property, as far as the bank was concerned we were 3 individuals buying 1 property, we had our own partnership agreement which dictates that nature of our partnership, but the lending excludes the partnership for all intents and purposes.

For another project that we’re running which is a short term flip, we’re utilising a discretionary trust so we can allocate funds to the lower income earners.

Long story short, talk to your accountant, bank and/or mortgage broker and they’ll point you in the right direction.

D.

Viral

Yes it is possible with a couple of lenders who will allow for the loan to be any of the names on the title however there is an underlying guarantee provided so that all parties are responsible for the entire loan.

EG

Property purchased in the name of ABC Pty Ltd with 2 Directors for $250K
A 90% loan would be set up as follows:
Loan # 1 in the name of Jack Smith for $112,500
Loan # 2 in the name of Wendy Smith for $112,500

In saying this however both clients are jointly and severably liable for the entire debt as Director of the Company.

Cheers

Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner.
Ph: 07 3720 1888
[email protected]