Has anyone dealt with NuPath before?

Hi All,

I've started dealing with a company called NuPath www.nupath.net.au for financial planning services and am wondering if anyone on here has dealt with them before and has any feedback? Initial meetings with them have been good but my concern is they have only been around for 2 years so hard to gauge if there investment strategies actually work.

The basic idea of the strategy they have proposed to us is to purchase an investment property, in particular a newly built house on an interest only loan and use the tax breaks\depreciation to pay down the mortgage on our live in home. Once the mortgage of our live in home is cleared we can then start paying down the investment or rinse and repeat the strategy to add another investment property to our portfolio. They are pretty much a one stop shop and do everything from getting the loan to finding the right investment which takes a lot of guess work out it for us. On paper it all looks sound and focuses on using the investment property to reduce non-tax deductible debt rather than Capital gains although that would be nice as well.

Is anyone else on here using a similar strategy?

Appreciate the replies.

 

No I invest for gain not tax deductions.

 

This is a joke right?

 

Depends on your own goals and level of aggression. Their 'strategy' (if you can call it that) to build wealth is extremely slow. It may suit some, but definitely not ideal for many, many others.

Also I have a pet hate for any company that is a '1 stop shop'. No matter what they tell you, their transparency will never be enough and the conflict of interest is unavoidable imo.

Tread very carefully. If it were me, I'd run. Fast.

 

In summary the financial advice you've received is:
* Buy an investment property
* Get some tax deductions and put those refunds towards paying off non-deductible debt
* Make extra repayments from your own pocket to pay off non-deductible debt.

Not exactly rocket science. Essentially you're making extra repayments on your home so you can own it sooner. Your grandparents probably gave you that advice.


Investing solely for tax deductions is a bad strategy On some level, tax deductions mean you're loosing money so there needs to be more to it than just a tax deduction. Ideally you want an investment that is increasing in value or giving you cashflow (which might mean you actually pay some tax).


This company looks to be a financial planner rather than an outright one-stop-shop (which should be avoided). I wouldn't let them recommend the property you purchase as this is a conflict of interest.

Instead you should do some research and find a property yourself, or engage a buyers agent to help you. Odds are you won't buy a new investment property. Whilst this might mean fewer tax deductions, it would probably be a better investment which will be a better overall result. Brand new properties can make good investments, but quite often they don't.

 

understand that you want to reduce the non deductible debt on your PPOR by using the "suggested Strategy", but what happens to the "investment property" in a few yrs time? will the value go up or down? how likely will its value go up? if it goes down, you are in negative capital.

why not buy an good solid investment property ( which has been discussed many times on PC), and let its value grow, and at the same time using Debt Recycle strategy to reduce your PPOR debt?

 

Thanks for the replies.

One stop shop was probably a bad term to use, as Peter said they are more a financial planning company and an investment property was the most viable solution they thought for us. I've looked into buyers agents but again it's hard to know if your best interests are in mind, especially when there fee is a % of the purchase price.

The plan I outlined above had our home debt cleared in 6 years and the investment property debt cleared in 13 without extra payments being made. I would have to nearly double my payments to achieve that with just extra payments on the loan and while I said capital gains isn't the main focus obviously i'm not going to approve an investment in some backwater and you would expect to see some capital gains over 6 years.

I'm more interested in thoughts of buying a new property v's an older property, the thinking being less money spent on maintenance of a new property and tax deductions that can be made against the depreciation of the new property?

And if anyone has used them before.

Cheers

 

Then perhaps give some consideration to choosing a reputable BA who charges a flat fee? There are plenty that do.

 

majority of the BAs on this forum are worth considering

 

Is a BA working on a 2% commission going to convince you to pay $100k extra (above your price range) just to make some extra $$?

 

That alone would be enough to make me say "thanks but no thanks".

The old question is - how are they getting paid ?

Are you paying an hourly rate for this service and what agreement is in place ?

Lots of scope for them to act against your best interests.

Personally I would never buy a newly built home - the scope for adding value and capital gains is reduced. It is also the type of property where developers most often pay kickbacks to ädvisors".

 

Haven't paid them anything so far. They do get a kickback from the builder and are paid a sales commission from whatever bank the investment loan is with, they were open about that. They were also open to looking at investment properties I had found myself. If we start the process of them securing a loan\property etc it's $1000 deposit which they keep if for some reason we halt the process because we think the properties they are finding are ****. I think most Buyers agents charge an upfront fee before they start doing the leg work as well?

 

I thought they were financial advisors - the web link seemed to show how they would advise on cashflow management etc.

If you need assistance getting a strategy together and organising your finances - then an advisor would be a good option.

This should be separate from using a Buyers Agent and getting a loan - when they are all combined there is a risk of them not acting in your best interests.

Looking at a property you recommend is different from proceeding with that.

I'd also never use a Buyers Agent trhat was getting a kickback from a builder - whether they disclose it or not. It would be likely that they only recommend properties where a kickback is available - rather than the best property in the market for you.

 

They are financial advisers, investment property is the strategy they recommended for us to clear our existing debt PPOR and build capital for retirement.

 

I've got to say that I'm incredibly sceptical of this claim. I've been investing for 20 years, I've seen thousands of investment scenarios. I've never seen anything that would come close to this outcome that's based only on tax incentives.

For most people the actual $$$ tax refund on a single average property is somewhere between $1000 and $6000 a year. To pay off a 30 year mortgage in 6 years, you need to be contributing about 3-4 times the minimum repayment. Unless your existing mortgage is tiny, taxable income is very high and the IP value is quite large, I suspect there's been some interesting manipulation of the figures here.

It might be possible with an aggressive debt recycling strategy, but it's probably still optimistic unless you're you're saving as well.

Worth noting that property isn't the greatest asset class for active and aggressive debt recycling as the unit cost is far too high. You can't recycling $20k or even $100k and buy a property with it, unless you go further into debt (which probably won't leave you debt fee in 13 years).

Also I've noticed that debt recycling is very dependant on buying good quality investments. If the investments don't perform, it's not much better than a simple savings strategy and it can be a lot worse.

 

OK - I thought you said they would also source the property and organise the loan.

No issue if they only advise you on strategy and leave it to you to source a Buyers Agent and Mortgage Broker (if you chose to use them).

Big problem if they look to offer those additional services as well - that is where they stop being advisers and become spruikers. Then you have to question what their stategy advice is motivated by.

 

For some reason everyone on here seems pretty restrained in voicing what I'm sure most of us experienced investors are thinking...

Personal opinion: Don't walk, run. Keep running, don't look back. These sort of investment or financial advisers promise the world and inevitably fail to deliver. We see them pop up all the time.

If you're serious about investing, then sit and read everything you can on this forum for 3 to 6 months before buying anything. Better than any one adviser or service.

 

@jstirl there is no AFSL on the nupath website, they're not financial planners.

This is like a version of Mybudget with add-ons, including property sales. As mentioned by others, the projections they've given you are extremely unlikely.

 

As @thatbum suggests, my previous comments were restrained on the assumption there was a financial plan being put in place.

If they're not actually financial planners, get the hell out of there.