Hi everyone! This is my first post so please be kind!!
After seeing an old, character filled Sydney terrace I wanted sold for mid $800's, which then sold at auction renovated for $1.5M about 1.5yrs later, I am determined not to miss a good opportunity again!
I've found a block of 4 in reasonable condition being offered that is company title. I was thinking of getting a loan/loans with 4 friends and purchasing the block together, strata titling it and rejuvenating the entire block and the 4 of us either holding on to our allocated unit or selling them all.
Is there any advice out there some of you experts could pass on to me??
Old tricks for a new player??Any advice at all would be extremely appreciated!
Regasrds,
-Nick.Research – that is check (and read for yourself) the LEP, talk to the town planner at council who can tell you whether it could be approved for strata subdivision or whether it is non-complying development, get an estimate from a builder as to what all the costs of conversion to meet BCA requirements would be etc.
I have been told that the only way that allows JV partners to keep/sell/own a single unit in a block is by setting up a partitioning agreement prior to purchase. I believe the usual JV agreements are viewed as %ownership of every unit by the ATO. I am not an expert in this area. Check it out with your accountant and solicitor before you buy.
What you are proposing is achievable, and probably desirable! As Jen1 points out, your intentions need to be clear and accommodated by the contract you put together and partitioning may be the answer. Generally if your consortium were to buy together you would do so as tenants in common. This would suggest that a single facility secured by the property and garranteed by each of you would be used as the financier needs access to the security. If you each had different loans only one lender can have first mortgage.
There may also be an additional benefit in allocating and securing on title the "air rights" over the apartments for future development. My advice would be to consider the structure (according to your goals and intentions) and find a property to suit those intentions – you can always find a deal to suit the structure.
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