I always thought it was honest,the humble-quite people that I know are the ones I keep a eye on to see which way they are going and what they are doing.. does not matter that much,afterall it's just different opinions and that,s what I learn from..willair..I always thought that was 'In My Humble Opinion'. Its a bit like LOL isn't it - some people think it means Lots of Love - others Laughing Out Loud.
Oh this web business
3 Investors!
- Thread starter navjit6
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any arrangement will work if you all want it to,
but renos are not for everyone and the main reason you don't do partnerships
with relatives is so that you don't harm the relationship.
If you were going to do reno's what would be the ultimate goal?
I guess you could split the proceeds and then put the money towards
purchases in individual names?
But the buying and selling process has a large amount of costs and you also pay income tax on the capital gains.
What's the point of that?
I'd rather buy in individual names, reno and keep
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Erm, I must ask, why? That is his investment, if you're keen on getting involved in something, you should be putting the pennies into your own savings to contribute once you get whatever trust structure you eventually decide on going. This just makes things messy from the outset IMO.
I think trust type structures can work for this sort of setup - but you need to make it air tight. I have seen an immediate family member bury a sibling for $500,000. It not only can happen, it does happen...often. Don't be foolish and think 'oh it won't happen to me' - because it won't mean anything if it all falls apart.
It's a tale as old as modern civilization. A few years back there way a hottie (by all accounts, which are scribed on the walls of her tomb) called Cleopatra VI Tryphaena who had a nice little plot of land under her control (Egypt). That was, until her sister Berenice IV came along and killed her. It's fair to say, that family tale didn't get much prettier over the following generations either - which is what makes it such a good lesson.
Cheers
Greg
Bill thanks for your reply, appreciate it. ultimate goal is to obtain financial freedom, and retire at a young age, around 35. At the moment I think i need to do plenty more research and learning. there are a lot of options and there are a few good ones, but i guess it is about trying to make the best choice. So i am going to do some thinking about the ways it can be done, and which way is best and suits us three. We have some time to think about it, so its ok.
since my brother has a PPOR, and we are renovating that currently. 6 months are nearly up, will take another 4-6months to complete renovations. while that is happening i can buy PPOR, live there for a while, and also renovate and sell within 12-18 months..and then my cousin can also do same for himself. and we can work together on the properties doing reno's. We wont have to pay CGT coz PPOR and me and my cuzin will each be able to get FHOG. i guess that is a start and then after a year we could either hold onto those properties and rent for up to 6 years without having to pay capital gains tax (will have to check on the actual taxation rules, but it is something like that) or we could sell and buy IP's .
I just had another question. Buying and Selling process of PPOR/IP, do you know where i could find information on the costs involved. maybe even an excel spreadsheet or somewhere in this forum? are buying/selling costs deductible for IP or do they just come of the capital gain..(i.e. total cost of buying was 300k (including all costs), sold for $350(including all costs), so capital gain would be 50k and half of that if held for over 12 months??
since my brother has a PPOR, and we are renovating that currently. 6 months are nearly up, will take another 4-6months to complete renovations. while that is happening i can buy PPOR, live there for a while, and also renovate and sell within 12-18 months..and then my cousin can also do same for himself. and we can work together on the properties doing reno's. We wont have to pay CGT coz PPOR and me and my cuzin will each be able to get FHOG. i guess that is a start and then after a year we could either hold onto those properties and rent for up to 6 years without having to pay capital gains tax (will have to check on the actual taxation rules, but it is something like that) or we could sell and buy IP's .
I just had another question. Buying and Selling process of PPOR/IP, do you know where i could find information on the costs involved. maybe even an excel spreadsheet or somewhere in this forum? are buying/selling costs deductible for IP or do they just come of the capital gain..(i.e. total cost of buying was 300k (including all costs), sold for $350(including all costs), so capital gain would be 50k and half of that if held for over 12 months??
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you guys don't seem to understand, all us 3, see it as...its not his investment, not my investment, its our investment. He needed some money because he was paying of loan, and also renovating the house, so i gave $20k. I am not going to ask for it back. tmrw comes, i buy i house i know he will do the same. Whether he has all the money in his account or i do, we all think of it as ours, and always will. we live together, and will continue to do so in future(except for 6 months when have to move out for FHOG). even after we both get married, my brother is already engaged, we will continue to live together. i understand a lot of you's are thinking that it is risky we invest together and can cause a lot of trouble in the future, and that things can go wrong. and those things can happen, but i am so sure it wont. and thanks for your warnings. i understand they are genuine because a lot of this does happen. but if you could please cut that part out, i understand and am fully aware of the part. its all about giving/taking, accepting decisions/ sacrificing and as long as we continue to do that, then it will be all good. I know they will and I know i will. what i am more worried about is how to go about it, what would be more beneficial/tax effective.
You're right. We don't understand. The concepts are too alien. You genuinely believe it will work. I'm not sure it's because you've seen it work in your family, or you just believe it because they're your brothers. It might work out, it might not. I want it to work for you, I really do. But I'm too aware of human weaknesses to believe it will work out that easily. I certainly wouldn't do it, because I'm not selfless enough and can't bring myself to believe others will also be that selfless.
But buying in 3 names still sucks from a serviceability point of view. The bank won't have the same faith you do.
yeh, ive seen it from family and i can see it in my brother and cousin. my cousin was living with me for the first 16years of his life, he is only 19.
we are not going to buy in all three of our names as i figured as many people said that wont be able to continue borrowing. like i said in previous post i will get FIrst home owners grant, my cuzin will get his aswelll...reno those 2 houses..and from taht willl take at least a year, so got plenty of time to plan/learn/figure out what to do next. i never thought these forums could be so useful. thanks everyone
we are not going to buy in all three of our names as i figured as many people said that wont be able to continue borrowing. like i said in previous post i will get FIrst home owners grant, my cuzin will get his aswelll...reno those 2 houses..and from taht willl take at least a year, so got plenty of time to plan/learn/figure out what to do next. i never thought these forums could be so useful. thanks everyone
I recall the following when I was a kid;
Three families coming to town from South-Eastern Europe, they combined their funds and purchased a property and all lived together (mums-dads-kids) a tight squeeze. Over time I guess they paid down a large chunk of that mortgage.
The men were working in the building trade and some time later they purchased a local business (video store...…back in the days of the VHS-BETACORD fight), then they purchased a brand new property into which one of the families moved. Not too long after they purchased another new property and the second family moved into it, then a third property and the final family moved out. The original property then became a rental property.
They moved onto purchase a deli in town and started a building company together
They also built a block of serviced units that one of the guys and his wife managed around the time that I left town
Not sure what they up to now or the complexities of the above and the arrangements these families had, but I’m sure they are all still doing well
It’s not that it doesn’t work; it just doesn’t work for everyone
Have you explored the options of a unit-trust?
Three families coming to town from South-Eastern Europe, they combined their funds and purchased a property and all lived together (mums-dads-kids) a tight squeeze. Over time I guess they paid down a large chunk of that mortgage.
The men were working in the building trade and some time later they purchased a local business (video store...…back in the days of the VHS-BETACORD fight), then they purchased a brand new property into which one of the families moved. Not too long after they purchased another new property and the second family moved into it, then a third property and the final family moved out. The original property then became a rental property.
They moved onto purchase a deli in town and started a building company together
They also built a block of serviced units that one of the guys and his wife managed around the time that I left town
Not sure what they up to now or the complexities of the above and the arrangements these families had, but I’m sure they are all still doing well
It’s not that it doesn’t work; it just doesn’t work for everyone
Have you explored the options of a unit-trust?
I understand that you think this will work for cultural reasons, but you have to understand that your brother is not your wife. He isn't your life partner. At some point what you and your wife, and he and his wife want out of life *will* diverge. And it is understood in most cultures that your responsibility to the family you make with your spouse comes first. So unless you all marry women who are willing to play second fiddle and work for another man's family instead of her own (unlikely), this can't work. I certainly wouldn't marry a man whose labours were not focused on our own family unit, and I don't know any woman who would.
Dude, I get the feeling of the two of us I am the one that understands. My brother lost hundreds of thousands of dollars at the hand of our father, who has since vanished. They didn't just live together for 21 years, they didn't just work together in a construction company they shared - they shared the same blood. Siblings do the wrong thing frequently to one another, but parents? Sadly, it does happen.
I'm not saying don't do it - you are clearly going to despite seeking and receiving advice from your peers here. All I'm saying is protect yourself legally using the structures that as others suggest will be more beneficial when it comes to serviceability.
If that's not something you will entertain (despite mentioning it yourself) then may I kindly suggest you are on the wrong forum. I'm sure there's plenty of gambling forums out there.
Cheers
Greg
It's not just the three men anyway. As soon as one of you marry, or even live with a girlfriend these days, she has a financial interest in everything. So say your cousin marries then for whatever reason gets divorced, unless he has truckloads of cash and will surrender enough that its 50% of his wealth, then a sale of your asset could be forced and possibly at the bottom of a cycle.
Cheers
Greg
Hi navjit6,
I read in a API magazine a while ago that there was a local club (football club I think?) that created a unit trust where every unitholder contributted certain amount each month.
After 6 or 12 month, the trust was able to purchase a property in the name of the trust using the income of the trust (the untiholder's monthly contribution) and the rent of the property to comply with the lender serviciability requirements. I think the trust borrowed 80% of the property value.
I don't know if the lenders are still keen to participate in such arrangements but a possibility worthwhile to explore. If the structure has the equity or depost and the income to service the loan, it should be possible to find a lender. Have a chat with a finance broker.
Good Luck,
Roberto.
I read in a API magazine a while ago that there was a local club (football club I think?) that created a unit trust where every unitholder contributted certain amount each month.
After 6 or 12 month, the trust was able to purchase a property in the name of the trust using the income of the trust (the untiholder's monthly contribution) and the rent of the property to comply with the lender serviciability requirements. I think the trust borrowed 80% of the property value.
I don't know if the lenders are still keen to participate in such arrangements but a possibility worthwhile to explore. If the structure has the equity or depost and the income to service the loan, it should be possible to find a lender. Have a chat with a finance broker.
Good Luck,
Roberto.
that is true and we have thought about that, we aint entering into this lightly. undercover...well if my cuzin is divorced then if its his asset or my asset that has to go, then so be it. to me it makes no difff if i loss money or he does. to us its the same....it is our responsibility to worry about the future and if we can continue to be together. I am not here to ask questions about that, i am aware of the risks.
what i am after is what is the best way for us three to invest together (without worrying about the problems that we could have). i am trying to find out what kind of trust to set up, or is it better to enter into a partnership, do in individual names, etc etc. but we are all going to provide the same capital and share the expenses, and profits evenly.
Is it best to set up a separate bank account, to separate our own personal accounts, and it would be easier to manage.
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thanks redwing....working together has big benefits/rewards like your example. but you have to be able to put up with each other and sacrifice for each other a lot or it will not work...thats the hardest part because people want to do what they want to do.
i know another indian families they live in 1 house....parents, 3 sons, their wifes, i think there is 8 or 9 kids, all in a 3 bedroom, 1 bathroom house. its all happens because everyone listens to each other, sacrifices..extended families has been a part of our culture and that is how we have been brought up, and we are happy to continue to do that.
do u think a unit trust is worthwhile???..i will look into that...how would that work, is it easier to buy property under a trust name, like not 1 or 2, say 5 IP's???
People give the same reasons for not doing a prenup, divorces still happen, not to everyone, but they still happen statistically.
I used to work for a cambodian guy who organised 'handloans' for the local expat cambodian community. Each memebr contributed $1000 per month, each member had a turn at receiving the tens of thousands each month to use as a deposit etc for a house or business etc. Worked fine until a couple of them refused to pay.
There are so many better, legal ways to build wealth and protect assetts. Money/wealth and trust are not mutually exclusive, however if the other members of a family unit would be so offended by one members wish to protect their assetts, in that relationship, they are seen as one. Just like one spouse refusing to sign a pre-nup.
What are the benifits of purchasing together? What can be acheived that cant be acheived seperately? Why cant you still share a living space, or some savings/ living expenses without sharing everything? What does sharing everything do that seperately cant be done?
This thread reminds me a little of similar discussions on the benifits of Xcoll.
I used to work for a cambodian guy who organised 'handloans' for the local expat cambodian community. Each memebr contributed $1000 per month, each member had a turn at receiving the tens of thousands each month to use as a deposit etc for a house or business etc. Worked fine until a couple of them refused to pay.
There are so many better, legal ways to build wealth and protect assetts. Money/wealth and trust are not mutually exclusive, however if the other members of a family unit would be so offended by one members wish to protect their assetts, in that relationship, they are seen as one. Just like one spouse refusing to sign a pre-nup.
What are the benifits of purchasing together? What can be acheived that cant be acheived seperately? Why cant you still share a living space, or some savings/ living expenses without sharing everything? What does sharing everything do that seperately cant be done?
This thread reminds me a little of similar discussions on the benifits of Xcoll.
It may be able to be done, but it isn't healthy. This example involves 16-17 people, including 4 couples, in a three bedroom house. I take it that at least two couples share a room. How do they have any personal or physical intimacy? How do they build a marriage-centered immediate family in a cramped melting pot of four of them, where there isn't even a sanctuary for sex? How do those children learn boundaries around privacy and learn that they are important as individuals as well as part of a group?
I do value family and I do think the West is too individualised, but that family is a prime example of sacrificing so much to save money that you lose sight of what you're saving it for. They could share two houses instead of one, still save money for the future, and have a halfway decent life in the meantime.
I have no doubt Navjit will reach his goals by 35. This way of investing is a cultural thing. There is comfort in numbers especially if you are from a minority ethnic group. Us Aussies dont understand that some families live together with 3 generations plus cousins under the one household. The familiy ties virtuall never break until the second generation comes along.
The key here is that moving with 3 will give you support and motivation to keep going until you drop!
Good luck
Aussie
The key here is that moving with 3 will give you support and motivation to keep going until you drop!
Good luck
Aussie
i am not trying to say share everything for investment. We are going to set up a separate bank account, each contribute the exact amount into that for expenses relating to investment, and then profits distributed equally.
some things with my brother will be shared more coz we live together...like i gave him 20k for his PPOR deposit. if he has money and i need it, he will give...thats personal, how we do things, what is that to you?
