Hi Guys,
I’m looking at varying my investing and adding older properties bought well under value and renovated to my portfolio but I want to know the best way to structure this.
I want to do this in partnership with a mate but don’t want it to have any association with my personal investments.
If I was to setup a Pty Ltd and trust could I have all the assets secured in there and pay back returns to investors out of the cash flow and maintain 100& equity in the company?
IE… Joe invests 20K in our company we buy a place and renovate and give you say 5% return on his money over an agreed time?
Is there a better way to do this?
Dave.
Best to use a company as trustee of a trust to reduce the risk. But this opens up other problems such as increased land tax, losses quarantined and personal guarantees – which will expose your personal assets.
But I am not sure there is a better way – unless you can convince him to take all the risk and you guarantee nothing!
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
Terry is partially right. However, losses do not need to be quarantined – only if you use the wrong type of trust. Have a look at the Chan & Naylor web site. They are experts at setting up trust structures and specialise in property. I am sure they have the exact right structure for what you want.
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