Flipping company?

You should only start the company with nominal value - say $2 - for the shares and then loan the company what it needs. Take security for the loan so you will be a priority creditor if something goes wrong.

Shares should be owned by a DT for asset protection and Tax reasons. You won't want tor retain earnings in the company because of risk so get them out into the trust as a dividend and then into a bucket company.

I have written more detail here: Legal Tip: Funding a New Company Running a Business

 

I charge $660 for a general advice session = a small sum in the scheme of things.

 

Did you say a scheme ?.....

 

I don't believe you have to pay GST on established homes only on new property you do. However if a property has been extensively renovated, GST may apply. This may be different under a company structure

I may be wrong but I have read it on the ATO website, property chat/somersoft I think.

 

I am fairly certain that if a company buys a house, renovates it to the point that ATO considers it a new dwelling and then the company sells the property, it would have to pat GST to the government. The company may be able to sell using the margin scheme but either way, GST would apply

 

There is a secret to flipping ..... there needs to be fat in th deal, you have to make money

 

I think that is the same secret as developing

 

How did you end up going with this venture Perthguy? I'm interested in doing something similar myself as I've been flipping houses successfully for years and want to move into it full time.

 

Id also be very curious, Ive done a few new myself as a lic builder but cashflow is what hurts with this type of thing. The step into full-time needs to be supported with additional income to borrow in my opinion.

 

I know of builders who do flips, both new builds and renovating in my area on top of doing work for other people. I don't know their details but I assumed they just did it through their company.

Being able to do the bulk of the reno work myself, I've had excellent results with every one of my flips. Though they've all been PPOR's (either my own or a relative) even if I had to pay CGT or other taxes I still would have come out ahead.

Unfortunately I've had to have a day job in order to get home loans which is a massive waste of time for me.

I'm trying to decide to either do handyman and reno work for other people (or freelance web and graphic design which I'm qualified for) as either a company or sole trader for 2 years in order to produce an income to get finance. Then perhaps do the flips through my business in order to use the profits as an income.

Otherwise I will just keep working full time for someone else, quit after finance approval, do the flip then look for work again. It's getting old though lol

 

@recko have you thought about going into a JV with a partner who has serviceability?