Hi all,
I'm keen to work towards being a full-time renovator. Has anyone else set themselves up in this manner recently, and if so, how is the matter of financing being addressed? I am guessing that there would be some trouble securing finance since there would not be x number of months worth of gainful employment with the one employer.
?
Thanks in advance for your thoughts
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Sure will be problems with no job.
Maybe you could work with a partner who can qualify for the finance? Or keep working while renovating.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
All depends on the lvr and the available equity you have in other properties.
Richard Taylor | Australia's leading private lender
Hi Richard and Terry – thankyou both for your responses
There is $250k equity in property I already own. I have no hassle with working along the way, but it would be annoying to have to wait a long period of time before making a start, due to having to show a certain number of months of employment. I have substantial savings to draw upon even if I should find myself unemployed. It would be unfortunate if the best any finance broker could offer would be for eg 60% lvr. It would very much slow things down.
What is the minimum number of consective months of employment (with the one employer) must be shown, and how much lvr do you suppose I'd be likely to be offered by financiers?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
1 day may be enough in certain circumstances, under 80% LVR.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Personally I would be looking to set up a flexible investment line of credit now over your existing securities and then as Terry has mentioned you would be able to get upto 80% lvr with a 1 Day ABN.
Couple of things to bear in mind.
1) Dont name your Company / Trust "XYZ Property Renovators Pty Ltd" or " The Smith Property Developer Trust" or have any mention of the word property in it as lenders just love to decline loans for clients trying to get residential long term finance for really what is short term development.
2) If you havent already done so register your ABN now as the longer you hold it the easier and more options you have for financing.
Richard Taylor | Australia's leading private lender
OK this is very handy. I don't have an ABN – a quick internet search shows me that indeed I could get an 80% lvr loan after a day if I had an ABN, albeit at a higher interest rate. Otherwise I'd need to have had the ABN for at least 12 months. Thanks guys!! You've set me on the right path
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
The longer the ABN the cheaper and better low doc loan. You will also have the employment option as well.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
OK. I gather I'd register for an ABN as a sole trader? And that tax would be calculated at the same rate (and in the same manner) as if I had no ABN?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
The ABN is only to qualify as a low doc client and sole trader is enough.
Tax is the same.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Brilliant! This solves my dilemma. I work in I.T. as a contractor in contracts that tend to be of duration 3mths/6mths. So I will possibly always face financing problems applying for loans as a regular individual with a short-term employment status. This would appear to be the solution – the missing piece of the puzzle. Thankyou !!
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
If you work in IT as a contractor you should already have an ABN and could use that as proof of employment for a low doc loan. But you may also qualify for normal loans if you can produce 2 years tax returns. Low Docs have some drawbacks such as LMI
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Terry – thus far I haven't needed an ABN to work as a contractor as I simply become a PAYG employee of the agency that commissioned the role, for the duration of the contract.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Ok i would registering one this morning then.
Richard Taylor | Australia's leading private lender
Done
I've applied for an ABN Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
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