3 Investors!

[marg4000]

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?

This is a public forum - you have put out a question and many people have gone to the trouble of giving you their opinion. There is some very good advice there, all given for free and with the best of intentions to help.

Don't shoot the messenger just because you don't like what advice is being given.
Marg

 

[deejay]

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?

Because you have asked for advice, and almost everyone has advised that you are exposing yourself to significant risk. Financial, emotional, and even marriagability.

You are free to accept those risks. No one is disputing that. But you seem to think there is no risk because of your culture and the dynamics of your family unit, and that's just not true. Fraud and betrayal happens in India, too. No one knows what a person is capable of until their back is against a wall. And I think people are concerned because it looks like you might be denying the risk, rather than accepting it.

For my part, I actually think your biggest risk is marriageability, which I imagine is very important in your culture. A lot of women, even traditional women, just do not want to be that far in bed with their inlaws. They want their own family and their own nest, y'know?

 

[geoffw]

Yes, Bill is right here! You will be "jointly and severally liable" for the debts - meaning that if you want to buy again in your own name at some point in the future, then the lender will see YOU as being responsible for the WHOLE debt AND only being entitled to 1/3 of the rental income as well.

This really is a killer. Navjit, I would really suggest that you talk to a property-savvy accountant to give you advice on how to structure things to achieve your goals.

We can give opinions, which you may or may not like- but as so much is at stake, you need to pay a professional.

 

[navjit6]

thanks aussie!!...its hard to explain the difference in lifestyle...what the other guys on this thread are saying can happen...and it does happen even in our culture (more and more these days...all because everything is getting westernized and people getting greedy). but i have faith it wont happen with us as we have a special bond. 1 person can only do so much, if you have 2 people (eg couple) then you can obviously do more. 3 it helps more...sometimes you feel a bit lazy..the other person gets you going..makes you do the work...and you do it. you cant succeed without hard work. but what 3 people can do, 1 person cant do. Its like anything. The more help you have, the faster it can be done, the more knowledge you have in different areas, considerably less costs.

we live together...my mum works, dad works, my brother works, i work...mum dad pay for everything and we dont give them any rent or pay for anything....but then we were building a house in our village in india and they asked for 10k each from us...so we gave to them. the way it works is diff to how others are but it works good for us.

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

 

[navjit6]

This is a public forum - you have put out a question and many people have gone to the trouble of giving you their opinion. There is some very good advice there, all given for free and with the best of intentions to help.

Don't shoot the messenger just because you don't like what advice is being given.
Marg

sorry i didnt mean to be rude..i really appreciate every1's advice....thanks..its that i know what you guys are saying about the risks, i dont want to know about that...i am more after what trust/partnership options are available and what is the best way to do it so we can minimize tax now and in the future

 

[fokas]

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.

Not to be rude deejay...but who are you to judge on something that you do not understand??
The poster didn't come online asking for opinions on his families' personal way of life or for criticism. He came asking for investing advice.

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.

Good luck

I won't give advice on a topic that I know little about...so I will just join aussierogue in saying good luck in your ventures. Learn lots, have plan Bs (and Cs) and don't lose sight of what is important to you.

 

[navjit6]

Because you have asked for advice, and almost everyone has advised that you are exposing yourself to significant risk. Financial, emotional, and even marriagability.

You are free to accept those risks. No one is disputing that. But you seem to think there is no risk because of your culture and the dynamics of your family unit, and that's just not true. Fraud and betrayal happens in India, too. No one knows what a person is capable of until their back is against a wall. And I think people are concerned because it looks like you might be denying the risk, rather than accepting it.

For my part, I actually think your biggest risk is marriageability, which I imagine is very important in your culture. A lot of women, even traditional women, just do not want to be that far in bed with their inlaws. They want their own family and their own nest, y'know?

i didnt mean to be rude deejay berfore, sorry.... i know people are letting me know about the risks, which are there..but thats not the advice i am after, i am more after how to save tax...to make a trust or partnership etc etc.

 

[navjit6]

thanks fokas

Not to be rude deejay...but who are you to judge on something that you do not understand??
The poster didn't come online asking for opinions on his families' personal way of life or for criticism. He came asking for investing advice.


I won't give advice on a topic that I know little about...so I will just join aussierogue in saying good luck in your ventures. Learn lots, have plan Bs (and Cs) and don't lose sight of what is important to you.

 

[BV]

i am more after how to save tax...to make a trust.

A unit trust is not necessarily a cheap option and in your case I'm guessing that a handshake is all you need to move forward

 

[deejay]

Not to be rude deejay...but who are you to judge on something that you do not understand??
The poster didn't come online asking for opinions on his families' personal way of life or for criticism. He came asking for investing advice.

Firstly, the family is not his. The poster put it forward as an example of a family in his community that perhaps he could emulate.

I was making the point that the example was an extreme one that seemed to be hitting a very poor balance of quality of life now and future return, and just because they were doing it didn't necessarily mean he should, or anyone should. And to me that is extremely pertinent to investment.

How far should we go to invest? Should we deprive our children of privacy or quality schooling? Should we deprive our spouses of intimacy by living in one or two rooms with children and/or extended family? Is it okay to do it for six months but not okay for ten years? If we aren't thinking about these issues, how on earth do we invest in a way that integrates with the rest of life?

 

[navjit6]

i didnt say i was going to emulate that, how they live is upto them,.... but we have been living together and will continue to do so...my parents have given me everything...i went to Nudgee College, one of the best schools in brisbane...went to university at UQ...which my parents paid for mainly, with me helping. things work differently. best way to make money is to save money

Firstly, the family is not his. The poster put it forward as an example of a family in his community that perhaps he could emulate.

I was making the point that the example was an extreme one that seemed to be hitting a very poor balance of quality of life now and future return, and just because they were doing it didn't necessarily mean he should, or anyone should. And to me that is extremely pertinent to investment.

How far should we go to invest? Should we deprive our children of privacy or quality schooling? Should we deprive our spouses of intimacy by living in one or two rooms with children and/or extended family? Is it okay to do it for six months but not okay for ten years? If we aren't thinking about these issues, how on earth do we invest in a way that integrates with the rest of life?

 

[Neophyte]

Ok here's a possible plan going forward.

1. Make sure your loans are Interest Only with 100% offset accounts.

2. Buy a PPOR in your name. Have your brother move in with you and turn his PPOR into an IP. Presuming his loan has an offset account redraw it to put against your non-deductible loan.

3. In 6-12 months repeat again for your cousin.

4. Keep offsetting as much of the non-deductible loan as possible, but make sure you can also shift this money easily. Don't pay the loan principle off, reduce interest bill by offset account

5. This is time to decide on phase 2.

At this point you own one property each. Two of the three are IP's with deductible debt. Everyone got the FHOG by buying in their own name. Everyone can sell without paying CGT (at least for the next few years).

Be careful to make sure everything you do is legal taxwise since you are planning to claim lots of deductions.

 

[navjit6]

Neophyte,

thanks for a great idea. my brother does have an offset account set up, though his loan isn't interest only. is it best to get into an interest only account even when say me or my cousin buy PPOR? Whats the benefit? Just that you dont have to pay any principle of the loan?

4. Keep offsetting as much of the non-deductible loan as possible, but make sure you can also shift this money easily. Don't pay the loan principle off, reduce interest bill by offset account

can you explain 4? what do you mean by offsetting as much of the non-deductible loan as possible. and also the next two lines are confusing me a little bit..

thanks
navjit

 

[13910]

my parents have given me everything...i went to Nudgee College, one of the best schools in brisbane...went to university at UQ...which my parents paid for mainly

Ahh, and suddenly it all makes sense. Haha.

Cheers
Greg

 

[navjit6]

what makes sense?

Ahh, and suddenly it all makes sense. Haha.

Cheers
Greg

 

[navjit6]

my brother bought his PPOR in July, P+I loan. he bought it using the FHOG, after he lives in it for 6months and then moves out and keeps as a IP, should he refinance the loan to just interest payments?


if i was to buy a PPOR using FHOG, and live in for the required 6months, and then use it as IP, do the banks allow you to take out IO loans for PPOR? are there any special requirements?

 

[willair]

...my parents have given me everything...i went to Nudgee College, one of the best schools in brisbane...went to university at UQ...which my parents paid for mainly, with me helping. things work differently. best way to make money is to save money

What happens now that you are in the real world,and you have to stand on your own 2 feet,and pay the bills and handle all the pressure,and understand which way the "ATO" WORK..
ha d ha ha..awillair..

 

[navjit6]

how do u know i haven't been standing on my own two feet, just coz my parents pay for my education??? thats a big assumption..... we are building a house in our village in india my dad asked me and my bro for $10k so we gave it to him, i just gave $20k for my bro's house too...just coz i dont pay for education/bills doesnt mean i bludge and i dont stand on my two feet,. our family works differently. u dont get the culture...and no i wont pay the bills...mum n dad will continue to pay the bills haha, you dont understand our culture!!! i am here for advice to help invest in property.

 

[navjit6]

What happens now that you are in the real world,and you have to stand on your own 2 feet,and pay the bills and handle all the pressure,and understand which way the "ATO" WORK..
ha d ha ha..awillair..

how do u know i haven't been standing on my own two feet, just coz my parents pay for my education??? thats a big assumption..... we are building a house in our village in india my dad asked me and my bro for $10k so we gave it to him, i just gave $20k for my bro's house too...just coz i dont pay for education/bills doesnt mean i bludge and i dont stand on my two feet,. our family works differently. u dont get the culture...and no i wont pay the bills...mum n dad will continue to pay the bills haha, you dont understand our culture!!! i am here for advice to help invest in property.

 

[bobbiemenzies]

Australia is a rich country, full of opportunity, where everyone who works hard can make a go of it. Legalities aside, I think it is lovely that families can work together as Navjit's has done. I wish them well.

Maybe we can all learn from this.