That's what I was trying to identify with before . Investing your smsf cash into unit trust of a reputable and reliable 3rd party developer/builder. You still get a slice of the pie. And for alot less effort and also a lot less risk of not completing the development due to funding difficulties. Because as freckle said investors provide seed capital rather then being debt captial from the banks..
The units of the unit trust which are held by the non SMSF entity could be used to raise capital. The units could be charged or used as security, but the SMSF owned units couldn't be mortgaged. But the SMSF could use a bare trust to borrow to acquire the units – but it would be very hard to find a lender willing to lend on this basis.
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 – I think you have nailed it. We do NOT want to use our SMSF to borrow. The SMSF is just contributing funds. I think I might not have been clear enough about that in my initial post.
The plan would be that the SMSF simply contributes cash to the deal (through buying units in the unit trust). We would personally borrow from the banks in our own names to purchase our units in the trust. So it is like a JV.
My concern is whether we can do this as we are all family. I believe there are complications about SMSF and related parties investing.
Does that sound like a workable plan? Or are there still problems?
Greg
Grreg wrote:Terry – I think you have nailed it. We do NOT want to use our SMSF to borrow. The SMSF is just contributing funds. I think I might not have been clear enough about that in my initial post.The plan would be that the SMSF simply contributes cash to the deal (through buying units in the unit trust). We would personally borrow from the banks in our own names to purchase our units in the trust. So it is like a JV.
My concern is whether we can do this as we are all family. I believe there are complications about SMSF and related parties investing.
Does that sound like a workable plan? Or are there still problems?
Greg
Should be doable.
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
Terryw wrote:Grreg wrote:Terry – I think you have nailed it. We do NOT want to use our SMSF to borrow. The SMSF is just contributing funds. I think I might not have been clear enough about that in my initial post.The plan would be that the SMSF simply contributes cash to the deal (through buying units in the unit trust). We would personally borrow from the banks in our own names to purchase our units in the trust. So it is like a JV.
My concern is whether we can do this as we are all family. I believe there are complications about SMSF and related parties investing.
Does that sound like a workable plan? Or are there still problems?
Greg
Should be doable.
And Anthony from A4 Companies seems to know a lot about SMSF structures and investing.
https://www.propertyinvesting.com/forums/legal-accounting/4347022#comment-284017I am a lawyer and could advise on the set up, but it is not something that I do everyday. But better to speak to Anthony I think.
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
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