how to borrow more / unlimted finance

Tkpurser wrote:

So in Steve’s book (0-130 properties, revised edition) starting at page 172 he talks about how once he reaches his borrowing capacity he then re-structures his family trust and then approaches another lendor.
I read in another post that this is no longer possible?
Would another bank loan money if say the original trustee (e.g Trustee Company Pty Ltd) was sacked as trustee and another company was created and made trustee which in turn the directors would then be the guarantor/s? Therefore creating a new trust structure?

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If the new company had the same directors the same problems would arise. You would also have trust assets owned by a non trustee which would cause other problems including possibly breach of existing mortgage agreements.

I don’t have an idea what Steven is talking about. But here is an example of how restructuring a trust could help in one instance.

Tom is director of Tommo Pty Ltd which is trustee of the Tombo Trust. Tommo Pty Ltd owns a property as trustee of the trust and the property is worth $500,000 at purchase with a loan of $400,000. After 5 years the property is now worth $1,000,000 and the Tom wants to cause the trust to purchase another property by accessing the equity and using this as a deposit.

But Tom had a dispute with a mobile phone company about large downloads and he refused to pay the bill. It went to court and Tom lost with the mobile company getting a judgment for $3000. Tom quickly paid the bill, but he now has a black mark on his credit file and he can no longer get finance at reasonable rates. This means the trust will no longer be able to get finance to access the equity or to buy a new property. Tom seeks legal advice and resigns as director of the Tommo Pty Ltd and his wife Mrs Tom becomes director. Mrs Tom is clean credit wise, and has good income so she can now provide personal guarantees for the existing loan, equity increase loan and new purchase loan. And the trust can now buy that new property.

Thanks Terryw, that’s a useful example.
So would I be correct in thinking that this following scenario could work?:

Tom is the director of Tommo Pty Ltd which is the trustee of Tommo Trust.
Tommo Pty Ltd owns a property as trustee of the trust and the property is worth $200,000 at purchase with a loan of $160,000. The property has not changed in value and Tom cannot purchase another investment property because the banks believe he has maxed out his lending capacity.
Tom resigns as director of Tommo Pty Ltd and Tom’s wife signs up as the new director.
Tommo Pty Ltd can now borrow more money to purchase a new property because Tom’s wife is the guarantor and has no debt plus secure work as say a nurse and a 20% deposit on hand.

Is this scenario feasible?