Hi,
This is my first post here so please be gentle
. Firstly I'd like to provide a bit of background so if anyone is kind enough to offer advise it can be a bit more tailored to my personal circumstances.– Mid 20's Male
– 80K P/A stable income
– Living at home
– Hex debt of around 20K
– 1 IP with debt of just over 300K. I have to pay around $10 to keep the IP a week. It produces positive cash flow after the tax year of around $40 bucks a week
I plan to continue investing in property but from what I've read. It's essential to get an appropriate structure set up in the beginning or it could come back to cost you a fortune. The girlfriend and I plan to move out next year so I have a great opportunity to save a lot in that time frame and buy as many IP as I can afford.
Can anyone suggest what sort of structuring they would set up for someone in my position? I have read about trust's, but when I went to see an accountant he seemed to think that it wasn't a good idea because I couldn't receive the tax breaks if the IP was in a Trust rather than my own name. Is this true?
My strategy moving forward is to own multiple properties and to continue investing until I'm finically free (that's the dream anyway)
Any help would be much appreciated and please ask me questions about my circumstances as I'm sure that I have left out important details.
Thank you in advance!
Hi,
I think you have to look at he costs of various structures as some for the average Joe are too high. You dont need one straight away but the further down the line you go then look into it. You do have it as a I/O loan right?
Dave
Hi PCF
Welcome aboard.
With loan structuring you want to ensure that your properties aren't cross collaterised (something that banks love to do) and you select the right lenders at the right time as you continue to accumulate investments so you don't burn your borrowing capacity too soon.
Without sounding biased – you should consult with a decent finance person that has experience in this area so you can worry about locating properties while they sort out the finance structure.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Hi Dave,
Yes, my loan is interest only. There are a couple of things that concern me if I don't get this sorted now rather than later. If I were to go into a trust structure later in life and all my IP were in my name. I would have to pay stamp duty to transfer the assets from my name into the trusts. This would eat up my potential profit. This is just one example but I'm sure there are others.
Cheers,
Hi Jamie,
Thanks for the advice. In regards to the finance person, who would best be able to give me advice on which structure is right for my circumstances? An accountant, lawyer, mortage broker??? All of the above? I'm willing to shell out decent $$$ in order to get my afairs right from the start and to maintain them. I just need advice on where to start.
Cheers,
A mortgage broker would be a good start. Most of don't charge a fee for service – we get paid a commission from the bank instead.
If you're comfortable with using phone/email than you can choose your broker from anywhere in the country.
An accountant/solicitor will advise on the entity type to purchase in.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
PCF Investor wrote:Hi Jamie,Thanks for the advice. In regards to the finance person, who would best be able to give me advice on which structure is right for my circumstances? An accountant, lawyer, mortage broker??? All of the above? I'm willing to shell out decent $$$ in order to get my afairs right from the start and to maintain them. I just need advice on where to start.
Cheers,
Only lawyers can advise on structures. Accountants can only advise on the tax aspects. A trust is a pure legal thing – person A promising to hold property for person B under whole bunch of conditions stipulated in a deed.
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
I see. So would it be best to see an accountant and a lawyer at the same time? I guess what I'm asking is where do I go and who do I make an appointment with. To sit down with them, explain my whole financial situation, explain what I'm planning to do and have them tell me my best options? Do you recommend any businesses or services for what I'm asking?
It doesn't need to be too complicated. Have a chat with a broker about general loan structuring and borrowing capacity and then go from there.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
PCF Investor wrote:I see. So would it be best to see an accountant and a lawyer at the same time? I guess what I'm asking is where do I go and who do I make an appointment with. To sit down with them, explain my whole financial situation, explain what I'm planning to do and have them tell me my best options? Do you recommend any businesses or services for what I'm asking?You could go and see one person who is qualified to advise in all 3 areas.
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
. Firstly I'd like to provide a bit of background so if anyone is kind enough to offer advise it can be a bit more tailored to my personal circumstances.
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