Financing for Investors in the Current Post APRA environment 2015

Discussion in 'Loans & Mortgage Brokers' started by sash, 4th Nov, 2015.

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  1. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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    I've been made aware of this issue quite recently about the negative affect having multiple credit applications can have regardless if they were accepted/approved; however, how does someone like Nathan Birch who has bought a serious number of properties continue to keep getting lending if having multiple credit applications in a short timeframe can have such a negative impact?


    Cheers,

    Taku
     
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  2. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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    This is great. Thanks for sharing. We should all this printed out and stuck on our walls lol
     
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  3. melbournian

    melbournian Well-Known Member

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    @Terry_w i thought you would be best one to relate with since you have experience in loans and legal structures. Do you have any clients that have financed their properties through overseas structures using overseas banks ? i know a lot of people who do this for large amounts but wanted to see if any locals or people here use this method.
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Overseas banks won't take Australian property as security. But I have clients who have borrowed against overseas banks and then used the funds here to purchase property.
     
  5. melbournian

    melbournian Well-Known Member

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    @Terry_w yes but the banks like ANZ in Singapore for does loans for Australian property. At that time I think it is only 1.5% last year

    I know a lot of people who have existing properties in Singapore refinance and then purchase here in Australia thus making them positive really in returns on majority of purchases

    The one I am looking at is that Banks like ANZ actually only offer these loans to non Australian residents and actually requires a trust created here and shell companies to get setup to access those cheaper funded loans
     
  6. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    When I lived in Japan NAB over there was offering loans at about 2% secured on Aussie property for Aussies living in Japan, and resident there, and earning Yen. Max LVR was 70% and loan was called in if you ever left Japan permanently or stopped earning in yen.

    I don't know anything of what you mention.
     
  7. melbournian

    melbournian Well-Known Member

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    @Terry_w thanks terry I was just thinking of taxation ang legal implications. the 2 types of loan which I know of how the Australian residents do this is through

    1. They already own overseas properties in certain Asian countries and either refinanced of fully paid offset ( Some of my relatives do this). So basically times the right time which is now as Singapore dollar is higher to AUD and then uses to purchase instant positive geared property at 1.5% which give or take 3% lower than loans here. On 500k would be more than 1k+ savings per month

    2. The other which i know of is using a shell company in Singapore to secure the loan with directors as local intermediaries or relatives with some seed capital to secure the loan at 1.5% for property in Australia as residents of Australia can't access the loan. This is similar to foreigners purchasing property in Indonesia . Property is then bought through Australian trust whose controlling entity is the shell company overseas after firb approval etc and then subsequently upon settlement couple months the directorship in the shell company overseas Is switched to original purchaser who provided the income. I know this was done by my friend on a dev site for ard 1.6mil. Obviously it is not feasible for smaller purchases with all the running around
     
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Same principles of deductibility of interest etc apply, but there are additional requirements such as withholding tax Tax Tip 37: Withhold tax on interest you pay to overseas entities

    Where there are foreign entites involved there will be some complex tax issues to consider. One of which is residency. A foreign company can operate in Australia, but it must register with ASIC and will be taxed differently to a resident company.
     
  9. MTR

    MTR Well-Known Member

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    Updates on this, just wondering how hard it currently is for you to source finance.

    I will be going down this road shortly again with my next development. I have a couple of options up my sleeve if necessary, however it would mean I would have to tip in around 40% of my own funds.

    MTR:)
     
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