I’m a newbie! What structure setup to start property investing in Adelaide???

Mortgage Broker in Adelaide – try Corey http://www.xlfinancial.com.au

Josh_P wrote:

Could you tell me  a specific lender which in your opinion would be a good one to start with. Also one which might be willing to work with someone who hasn't got a lot of capital behind him but has some good ideas

with the trusts I just thought that it offered more asset protection and tax benefits. The hard thing is working full time in my job and trying to piece together all the information to start property investing without losing money (especially with a family)

Hi Josh

It's impossible to provide any specific advice in regards to which lender you should approach with such limited info. Best to give Corey a buzz.

Cheers

Jamie

If your could list your financial position. Ie equity, cash, incomes, how many kids. It would give a better picture for people to comment on a structure that would be appropriate. It then would depend on the type of property you would be buying. You might not want to place a highly negatively geared property with high growth opportunity in a trust. Simply because of negative cashflow that might not be realized for years. It depends on your situation. 

Even if you found a positively geared property it would have to be around 9-10 percent yield. Banks only consider on average 80 percent with some less and some smaller ones more. 

You currently don't have much if any available equity in your current unit. 

I would focus on building up a deposit for your first property. A 200k house purchase is going to need at minimum 12.6 percent of purchase costs to afford it. 5 percent stamp duty 5 percent deposit and 2.5-2.6 percent LMI at 95 percent providing not rural or remote areas.  That's 25k. 

Look at your family budget and as a suggestion if you work during the day. Perhaps your wife could look to get a evening job. If you use your wage to live and your wife was earning 500 a week in a casual job you will have a deposit saved up in a year. IIf you are getting tax back put that in as your initial amount. 

Consider strategies where you might add value to the property after purchase in which you could potentially draw out some equity to repeat or to increase your rent 

Josh welcome to the forum and i hope you enjoy your time with us.

As Terry mentioned you need to work out where you want to go long term before you decide what you need short term.

You mentioned you have limited upfront cash funds and therefore depending on serviceability you may have to look at a 100% standard loan.

We deal with a couple of new lenders who are now looking at this market and we are trialing the facility for them.

Cheers

Yours in Finance

STill not enough detail to answer.

This is like trying goolge for medical advice. A sore stomach may be indigestion or it may be an appendix for example.

Is also not just a matter of determineing tje name of a structure but how to structure the structure. E.g you may think you need to set up a discretionary trust but who should be trustee. If a company who should be director who should be shareholder. How many shares what type of shares. Constitution or none. Terms of constution. Sharehokder agreements. What happens with loans. How to minimise guarantees.

With the trust who shoukd be appointor who backup appointor. What terms of the trust. Any restrictions on trustee benefiting. Any stamp duty implications on changing trustee. What about adding “partners” down the track. Can it be done and how.

What happens on your death?

What happpens onyour incapacity? Do you have a power of attorney? Could this attorney take control of you trustee company and or the role of appointor?

ETc etc

THis is why you need legal advice in setting up a structure. Find a lawyer with a spell checker.