Hallo Everyone
Hope this is the correct forum. I need the help of those who has done this before (which is most likely most of you) for information, guidelines and pointers.
We are 3 guys who want to start an investment business in residential property, while maintaining our current jobs. This will be run as a formal business. Each one will contribute equal financially, one will do the management, financial analysis and lead the team. He needs to be paid at market rates. Each investor will have a loan account that earns interest at the going rate. The exit plan will be to dissolve the business in 10 years time, sell off the assets and split the profits.
- What is the best legal structure to accommodate this scenario
- How will the structure maximize personal tax offsets (we will still be employed elsewhere) and minimize risk in case of litigation
- what insurance will be required to cover risk in case of a buss partner’s death, divorce etc
- If a buss partner wants to pull due to unforeseen circumstances
- Who can recommend a good accountant in Perth that understand property investments
- A lawyer in Perth that can help with the legal requirements and that is an investor himself
- Any other useful contacts in Perth that we will need in the next 3-6 months i.e real estate agents, property developers (off the plan options), quantity surveyor
- Any solid advice that will help us to research an area, set goals and find financing
Thanks in advance for your helpRegards
ottgGood accountant: Finkelstein Hickmott
Good broker: Loan FocusQ 1,2,3,4 – see 6
As far as I know, if you buy property in any kind of business or trust structure, you can't get tax breaks off personal income.
Hi CD
Thank you for the names. Excuse my ignorance but what does 6:P means?
Regards
The best way to set your business up is through a company, a company pays a flat rate of 30% tax. The three of you can then have each a 33% sharehold in the company, You will need to look into drawing up an agreement between yourselfs, You will need to talk to a lawyer about that, Along with setting up a company.
I will suggest one piece of advice, I have seen in many instances personally and through experiences through family, We've even owned mortgages against partners in business and it ends the same way 90% of the time, And that is failure.
It seems especially true when the parters are friends or family, Be very wary of what your getting yourself into, Each one of you will want to head in the direction of your own ideal, Expect many disagreements and even arguments.
Goodluck.
Whilst i wouldnt disgard a Pty Ltd structure i certainly wouldnt use it on its own for what you are wanting to achieve.
And shareholder transfers would incur stamp duty as the company is likely to be considered "Cash Rich" and therefore a Unit Trust structure would be bettter.
There are also 101 other considerations when it comes to financing and whether any of you at any time in the future want to go and buy your own PPOR or individual investment properties.
Richard Taylor | Australia's leading private lender
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