If two friends are buying a property in a joint ownership arrangement, can each use their proportionate equity to purchase another property (just as you do if you own a property by yourself)?
What joint ownership arrangement do you think is best for friends?
It can be done, but with great difficulty and danger.
If you want to use the property as security for a new property the second owner will need to guarantee the loan as his security is being used.
or
A better way would be to set up 2 LOCs on the first property and you use one and he uses one solely. Both names would be on both LOCs – or you could perhaps get one name on each, but the other would need to guarantee it. If he stops paying his LOC you will need to step in and start paying.
You should have a written agreement to cover this sort of thing.
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
As I see it, you would have to jointly take out the equity in your joint property (increasing your mortgage) then you can use your equity for whatever you wish.
Ownership structures could be tenant in common, partnership, jointly owning through a unit trust ect.
All have different tax and legal implications – time for accounting and legal advice
You must be logged in to reply to this topic. If you don't have an account, you can register here.
