Kickass broker and property trust accountant recommendations

Discussion in 'Property Experts' started by Positive_Rob, 24th Sep, 2016.

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  1. Terry_w

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

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    Nathan Yii Lawyers - Structuring & Estate Planning Law

    Nathan is my lecturer in Masters of Law degree - structuring subject. He specialises in trusts, tax and structuring.
     
  2. Bran

    Bran Well-Known Member

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    You lost me somewhere around the 2nd or 3rd "kick ass".

    I'm not a broker, but MsAli is, and she has already alluded to the impact that a purchasing trust has on serviceability. I don't see a great reason for doing this so early in your journey.

    Don't forget you forgo your CGT discount buying in a trust.

    And how do negative gearing properties get you filthy rich, what am I doing wrong?
     
  3. Barny

    Barny Well-Known Member

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    I thought cgt discount is still allowed in a trust.
     
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  4. skuzy

    skuzy Well-Known Member

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  5. Positive_Rob

    Positive_Rob Member

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    Oh sorry I didn't see the other replies terry.

    OK this all sounds good. They money has already been gifted and accepted.... So I can't do a thing from there.

    Well what structure would you use if you want to be able to funnel 100% income to your partner, have high personal asset protection, and a 50% capital gains discount? Those were all the reasons I like the look of a trust. Also once beneficiaries are set up can they be changed whenever a trustee wants?

    Hi bob, Yeah not so much gun ho about it all. I have bought a ppor using the $150k bur I also have 20k saved so $170k and 88k is used for the deposit. So we're down to $80k for investing. I'm going to wait until the ppor settles before anything. But I wanted to do the trust with a corporate trustee. And needed to make sure it was all set up before I started buying property.
     
  6. Terry_w

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

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    Trusts get access to the 50% CGT discount.

    You might be thinking of companies which don't.
     
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  7. Terry_w

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

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    How has the gift been documented? If it was an effective gift it could always be gifted back and then borrowed.

    I can't comment on what structure I would use as my situation is different to yours - I can't comment on what you should do as I don't know anything about your situation.

    One possible way to do it is to simply have your partner legal and beneficially own the property. Perhaps with a loan from yourself (at interest or interest free) or perhaps with a loan from your mum instead. You could lend 10 or 20% and she could borrow the rest. If she couldn't qualify for the loan you could go on as as a joint borrower or a guarantor (if by partner you mean spouse). Depending how you structure this it could be good asset protection in the event you ever went bankrupt - but not if she went bankrupt.

    This asset protection could be strengthened by taking a second mortgage as security for the loan. You could keep onlending money to increase the debt she owes you so as to track capital growth (maybe not fully).

    Lending money interest free has the same effect as diverting income from you to her.
     
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  8. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    What Peter T said. It means nothing to go buy 25 properties that won't do much for you. The old question applies - what's your strategy? I understand you're saying you'd buy in Tasmania etc but what will that property really do for you? I'm guessing you're still working out a strategy and hence the focus on the number of properties versus the quality of properties alone.

    It's exciting but first work out why a cheapie in Tasmania? Why a 150k property?? What will it do for you? I don't have a crystal ball but having been similarly excited when I started my journey thankfully I quickly realised it was a sure way of stalling the portfolio as you'd need growth and equity to move forward.
     
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  9. MTR

    MTR Well-Known Member

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    Don't you love mum's that do stuff like this:)
     
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  10. Terry_w

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

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    One more thing, Trusts can hinder serviceability in some ways, but they can also enhance it other ways..
     
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  11. Barny

    Barny Well-Known Member

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    Terry would a trust only hinder serviceability as you can't claim negative gearing?
     
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  12. Greyghost

    Greyghost Well-Known Member

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    Why not put the entire $150k against PPR, then redraw it/refinance, take the $88k if you wish for investing. At least it will then be deducible. You have then turned that $88k of non deductible debt into deductible debt. Same loan amount still against PPR, just $88k of it is now investment related.
     
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  13. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    Also to add a PPOR will limit borrowing esp at the income you suggest you have right now.
     
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  14. Terry_w

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

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    It could depending on the circumstances and the lenders - however these days with very low interest rates I have found lender negative gearing add backs are usually nil for most people.

    Keep in mind a trust can negative gear just like a person can.
     
  15. D.T.

    D.T. Specialist Property Manager Business Member

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    Seems a lot of people like to blow everything out of proportion and complicate stuff. What happened to KISS ?
     
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  16. Colin Rice

    Colin Rice Mortgage Broker Business Member

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    Could get maybe 1 or 2 more properties on that income if you have already purchased a PPOR. Possibly no more depending on debt levels?

    I would start to think of ways of increasing your earnings to assist serviceability in order to start moving toward your stated goals.

    Also mindsets towards money would need to be considered as there is no such thing as filthy rich. Being rich isnt filthy.

    Also certain ideas that you have gleaned from your studies may not be accurate and may need to be addresed. Reason I say this is you may be stuck on these and the professionals helping you will likely have other ideas to implement and they may end up "fighting" against your erroneous conclusions.

    To access the growth and subsequent equity you will need income.

    The first step is to consult a broker so you know whats possible for your current situation THEN formulate a strategy in conjunction with an accountant and lawyer.

    @Peter_Tersteeg is in Melbourne and will have trusted professionals he can refer you to.

    Thats an important point you need to explore with an MB.

    There still knocking about and wearing extra make up these days.
     
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  17. euro73

    euro73 Well-Known Member Business Member

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    Getting to 20+ properties is a lifetimes work. You'll need a lot of income for servicing purposes , a lot of luck with growth or with debt reduction so you can harvest deposits and costs and stamp duties for each purchase, and a lot more than just a good broker for all of those stars to align.

    The easiest time in history to grow a double digit portfolio was the credit boom era of the 90's and noughties , and even through that very generous, very investor friendly period of ever improving servicing on bank calcs, less than 1% of property investors reached 10+ properties, and only @ 3% reached 3 properties.

    That very expansive, investor friendly era ended last year by APRA and ASIC and was replaced by a less expansive set of lending policies - still reasonable for investors but far from what it was - so getting to 5,6 or 7 properties is now a real challenge for those not on very large incomes. Most investors couldnt get there when it was relatively easy, so in this more challenging lending environment one would assume even fewer starting out now will get there

    Trusts are a dumb ( yep I said dumb) way to do it for all but the very wealthy because of the weakness they create for servicing purposes. I use the word dumb because in a post APRA credit environment where investor servicing has already been pulled back by 30-40% per $1Million debt, giving away any servicing potential is precisely that ; dumb. Especially so if you have ambitions to get to more than 3 or 4 properties. Trusts have their place for sure and the very wealthy find great value in being able to distribute income to other members, and some professionals find them useful for their asset protection potential, but if you do not fall into one of those categories, I'd have a re-think.

    Of course, I only own 15 investment properties and generate 300K + in tax free income from my portfolio so I may not know much about any of this :) Oh, and Im also a broker....
     
    Last edited: 25th Sep, 2016
  18. Bran

    Bran Well-Known Member

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    Oh yeah - oops.
    Actually... I think I've had that in my head for about a year. Great news for me!
     
  19. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    Unless there is a valid reason to buy in a trust. ...I don't understand why people would complicate things when all that's required is taking action....

    Could lead to or be analysis paralysis related.
     
  20. bob shovel

    bob shovel Well-Known Member

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    Exactly. Accountant makes that call.
    This is how it went for me
    Me "is everything ok so far do we need to do a trust or anything else"
    Kickass accountant "no, not yet"
    Me "cheers mate, here's a bunch of money :D "
     
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