No deposit down loan

Hi
I want to purchase a home with two relatives.
Situation:
One relative working $50,000 employed for 12 months.
One relative not working, with two kids, currently renting @185.00 per week
Myself just started new job @35,000 per year - already have ppor debt of $225,000 & ip negatively geared @150.00 per week out of pocket (loans in joint names & husband earns $55,000 gross per year).
What would be the best way of structuring a loan ie: three different amounts for each person or one loan with all three names on it. Could we also look at no deposit down loans?
Thanks
 
Hi,

Something to consider is how long this deal will last? Are you going in together for a fixed term, ie 5yrs, or indefinate. From my experience, indefinate is messy.

Purchasing a property together shouldnt be too much of a problem, husbands and wifes do this all the time. And you can break down ownership proportionally (see legal advice about this).

You biggest issues will be "maintaining" the agreement.

First of all, you need everything in writing, I'm serious, do buy until all have signed and all have gotten INDEPENDANT legal advice.

The agreement, will cover, payments, repairs, selling, etc.

Also you need to consider, how are repairs paid? is this done in the same proportions?

What if one wants to get out sooner? do the other's have to pay up, how will the property be valued?

What if a partner of one of the joint owners wants to do something?, do they have a say?

Also rates, utilities, how about the phone?, will 3 phone lines be installed?

To me it looks like you have two layers, top layer is a formal partnership that owns the property, then a 2nd layer which is three tenants, co-renting the property. I say this because if one of the "tenants" damages the property, they are responsible for repairs to the "landlords" too.

Fun huh?
Michael G
 
Dear July,

I agree with Michael G. Buying with relatives is more messy than buying with partners and even with business partners you have to dot your "I"'s and cross your "T"'s.

Lot's of good advice in Michael's post.

If you believe the positives outweigh the negatives then with structuring it I would suggest that you put it in a unit trust as you will find it more easy to distribute income and also to sell the units later between the parties.

Cheers,

Sunstone.
 
Hi July

The most equitable way to structure this seems to be tennants in common with 33.33 % each.

As to wether its wise ???? The lenders will want you each to carry the full amount of the loan, so you are diluting future serviceability.

Much depends on what else you want to do.



Ta

Rolf
 
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