Hi there,
I recently joined property investing.com and e- mailed the community before christmas as we are relative new investers. We have 2 properties that we rent out per room. The first property is returning $670 per week and the second property (right next door) is returning $920 per week. We have been trying to continue this wonderful return by trying to buy more properties,only to have the banks saying No,as mortages total $764k. I have been reading the steve mcknight books and watching his dvd's. As the banks keep saying no as we have only had these properties for twelve months and are maxed out on my loan,because i was guided by an accountant to put both properties in my name.Also my annual income is $43k. Since watching steve's dvd's,as he says dont put properties in own name.We are trying to work out whether to sell and start again by buying properties in unit trusts or trust. We would also make a considerable amount on sale. We would love to get the communities input.(And Happy New Year to everyone.
Thankyou Shaun FitzpatrickHi Shaun
I did call you back so hopefully you got my message.
Email me a bit more of a breakdown and I can come back to you.
Unfortunately borrowing in Trust does not allow you to borrow more and i think Steve has clarified this point on a couple of ocassions. But for Asset protection and income distrubution, tax planning etc they are a must.
Still trying to figure our your Accountant suggested you put a + geared property in your own name.
Richard Taylor | Australia's leading private lender
Hi Shaun
I did call you back so hopefully you got my message.
Email me a bit more of a breakdown and I can come back to you.
Unfortunately borrowing in Trust does not allow you to borrow more and i think Steve has clarified this point on a couple of ocassions. But for Asset protection and income distrubution, tax planning etc they are a must.
Still trying to figure our your Accountant suggested you put a + geared property in your own name.
Richard Taylor | Australia's leading private lender
Talk to a mortgage broker to see if there are any products (low doc, no doc) which might allow you to keep expanding your portfolio, before doing anything drastic like selling. Even if you do have to sell, it may be worthwhile selling the properties into a structure, ie have your Trust (or other entity) buy the property from you. Talk to your accountant as well – though perhaps a new accountant who's more aware of how to help you with your plans to expand your portfolio. There may even be an accountant out there smart enough to do it in a manner that doesn't crystallise CGT; but I'm not sure about that.
Good luck, and congratulations on what you've achieved thus far, Tracey in Brisbane
Hi there Richard
yes i did get your message and lost your number and have been trying to find you this week. Thankyou for your call. Ok the position we are in at the moment is 1st loan $384k @7.18% 2nd loan $380k @7.35%. We are returning $1590 per week but the banks and brokers will not accept this at this point of time because was not shown on last years tax return (because we were not earning that much at that point of time) Interest only loan for 3 years (still 2 years remaining). Both properties are under guarantee. Is ther anything else you need to know.
Thankyou ShaunShaun
What is the market valuation of the 2 properties ?
Sounds like the existing rates are fixed rate products that is where your problem will be unless you have cash for a deposit on the next one.
Richard Taylor | Australia's leading private lender
Richard
Market valuation is around $900k and yes they are fixedHi Richard
my computer keeps dropping out as i am writing. Is it ok to call you tommorrow.
Thanks for your help ShaunHi Shaun
Thats where the problem lies.
You will be unable to access the equity in the properties with the present lender as the loans are fixed and no lender will take a
2nd mortgage on a X collateralised loan.Nodoc / lodoc is not an available option due to the lack of accessible equity.
Sure feel free to call me tomorrow afternoon as i will be in all of PM.
Richard Taylor | Australia's leading private lender
Hi Richard
So would i be better off selling and setting up again in trust,so as to use the trust as guarantor so we could do multiple properties and have some cash there from sales for deposits.There is no way that I would sell. There are heaps of lo doc loans that you can get from another bank which will allow you to continue investing. You need a good mortgage broker to help you out. Good mortgage brokers are hard to find!!!
There are differences in opinion as to whether you should invest in your own name or under a trust. Some very successful investors with up to 38 properties only invest in their own name as they are fairly sure that they will not be sued. I personally have only invested in my own name for many years.
There are definitely some advantages in putting the properties into trusts so you should consider that pathway as a possible option.
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