Commercial Property structure for purchase(s)

[alpina]

Hi all,

We have been looking at Commercial Properties of late and would like to know what peoples thoughts are in regards to purchase structure. Let me say that we will get appropriate accounting/legal advise if we proceed but at the same time I'm very interested to see what is happening out there in the "real world".

Basically we (business partner and I) are looking at purchasing a commercial property with views of purchasing more down the track. Let's assume that partnerships work so let's not factor in the reason why one should not go into partnerships

Lets say property value is $2m and we plan to purchase the property unecumbered by pulling equity from our other properties and negatively gearing it that way. We will each put in 50/50.

Plan is to pay down the loan, then use the commercial property for security for further investments moving forward.

My question is do we just purchase it under our individual names jointly or should we be looking at another structure, given that the intention is to do more than one deal?

All comments welcome.

Regards,

B

 

[Rolf Latham]

Hiya

Unit trust with your units held by your Family trust with a corporate trustee

But I dunno...............im a broker .........not an acct or a soli


ta
rolf

 

[APerry]

I agree with Rolf re the unit trust as an appropriate structure, of course you need an accountant to set something up specific to your circumstances, but from a lending point of view there are big advantages having the loan inside a structure such as this.

Regards
Alistair

 

[Pat]

Hi Alpina,

Alistair and Rolf are on the right track, a corporate trustee of the unit trust with discretionary trusts owning the units. It would not be necessary to have corporate trustees of the discretionary trusts because the asset protection is at the unit trust level where the property assets will be held.

Hopefully you can direct some business income into the structure to offset the negative gearing.