Help with loan structure

Hi everyone,
We are looking to buy 2 IPs and would love to hear your suggestions on the best way to structure the loans. Here’s our situation:
Partner:
Income - 60k
PPOR - paid off, value 750k, usable equity 600k
New IP - budget 500k

Me:
Income - 160k
1 IP - 375k loan, value 560k, usable equity 73k
New IP - budget 700k
Savings/offset - 370k. I’ve been offsetting IP loan as we don’t have any non-deductible debt.

How should we structure the loan to claim 100% interest deductions for new IPs?

Thank you in advance.

 

Individually you're both in a good position.

There's equity in your partner's property, you've got a lot of cash available. Either of these could be an easy source of deposits. From there you can borrow the remaining funds to purchase the properties.

The best way to structure this really depends on your individual and combined goals. Do you intend to invest separately, jointly, or some combination of both? The best solution to this really depends on what you're both comfortable with. I can see numerous solutions that are all valid, but a more in depth understanding of your individual and joint parameters and goals are needed.

 

Hi Peter,
Our goal is to minimise income tax and CGT when we sell later down the track. That’s why we thought we would put one IP under partner’s name with low income (thanks for all the post from this forum!). Should we:
1. Use savings to pay for deposits and purchasing expenses for both IPs; or
2. Use equity from PPOR & 1st IP to pay for deposits and purchasing expenses and keep savings in offset account to lowest interest payment for both IPs

Which option would help us achieve our goals?

 

Any ownership structure can be used, but the most useful will depend on your strategy and the path you take. Most likely it's not going to be perfect either (because there is no perfect ownership structure unless you can predict everything that's going to happen over your investment lifetime).

There's good reasons to purchase separately and keep your money separate. You'll also be able to acquire more assets if invest jointly, but for all sorts of reasons that might not suit you at this point in time.

I'd be happy to have a face to face and discuss ideas if you like. Better still, there's an investor meeting next Tuesday at the Mitcham Hotel. Come along and discuss your ideas there.