How to have investor funds available

Discussion in 'Loans & Mortgage Brokers' started by goodtimes, 11th Jun, 2018.

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  1. goodtimes

    goodtimes Well-Known Member

    Joined:
    30th Apr, 2016
    Posts:
    56
    Location:
    Nsw
    Hi

    Of course I will seek my own professional advice but I'm hoping to gain some insight from other's experiences and ideas here please.

    The situation is:
    I have a property with DA approved subdivision. I'm in talks with an investor about them funding the subdivision works and contributions in exchange for a discounted block.
    I have a home loan with a big 4 on the property. The investor is using cash funds.
    Hoping for input about how this can be structured.
    I have zero experience in JV's. I'm thinking there are different ways to structure this that have +s and -s.

    1) can they contribute the funds to have a share of the title? Is it easy to allocate exactly what they get? I.e. Not just a % of the total title, or a sqm area, but the block they get? Do they pay stamp duty to buy in? Do I pay gst on the sale of the portion?

    2) can they make an off the plan purchase from me for a proposed lot and exchange with a huge deposit that is releasable? Stamp duty and gst obviously apply here.

    Will either of these ideas work? What drawbacks do they have?

    Is anything like this possible while I have mortgage on it?

    What other options are there?

    Thanks for any input.
     
  2. hobartchic

    hobartchic Well-Known Member

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    Hobart
    Why not just sell the block to the developer?
     
    Beano likes this.
  3. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

    Joined:
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    Location:
    Gold Coast (Australia Wide)
    the best option is legal and tax advice perhaps ?

    ta
    rolf
     
  4. goodtimes

    goodtimes Well-Known Member

    Joined:
    30th Apr, 2016
    Posts:
    56
    Location:
    Nsw
    Thanks for the replies.

    Hobartchic - the reason is the party I am talking to is not a developer, just a person who wants a block and has the cash I need for services and council contributions. Finding a developer to sell it to would also defeat my goal of keeping the other blocks for my use.

    Rolf - that will happen. That is probably the best option for the majority of the posts on this whole forum! the purpose of the post was for people with experience in these scenarios to give input on what worked for them or what drawbacks they can have.

    Thanks
     
  5. Ethan Timor

    Ethan Timor Well-Known Member

    Joined:
    16th Nov, 2016
    Posts:
    154
    Location:
    Australia
    I think you’re not getting replies to this query because there are many answers and many of them would work.

    JV can be done in lots of ways and what works for you may not work for me. It’s really a case to case basis.

    Matt Jones talks a lot about JV. You could google him and get some ideas. He’s also open for (probably paid) consult if you’ll want to use his services down the line but Rolf made a strong point. Tax and legal advice could determine above all what’s right for you :)