RE: Joint & Severally Liable (Investing in partnerships)

[StuartW]

As requested by Rolf here is my article from April issue of API (http://www.somersoft.com/forums/showthread.php?t=19950).

http://www.prosolution.com.au/articles/partner.pdf

Cheers

Stu

 

[Rolf Latham]

Thanks Stu

ta

rolf

 

[Aceyducey]

Nice article Stu!

Cheers,

Aceyducey

 

[geoffw]

Thanks for the excellent article.

Just a quick question. In the diagram for Step 2, under Trust C2, is it a typo that "Sole beneficiary is Person B". Should that be "Person C" or is there something I have missed?

 

[StuartW]

Hi Geoff

Opps. You are correct, I missed that one!

Cheers

Stu

 

[MasterInvestor]

Hi Stu

Thank you for the article.

I am wondering if you have actually had any success in finding a lender that would lend to 3 different trusts for the same property, as per you trust example. I had not considered this method before as I just assumed it could not be done.

And have you ever seen Non Recourse finance happen. I have heard about it (firslty from Henry Kaye's courses), but in all my years of mortgage broking, I have never seen it to be achieveable in practice-even with low LVRs. However, I mainly deal with residential loans.

Thanks Stu.

MI

 

[StuartW]

Hello MI

1. NAB will do the structure outlined in the article.

2. I have only done non-recourse finance for commercial. Never residential.

Cheers

Stu

 

[MasterInvestor]

Thank you Stu.

I enjoy your articles.

Master Investor

 

[woohoo]

Hi Stu,
Nice article.
How come I was told by my broker that it can't be done, and that all partners have to be co-guarantors and that in the end the FULL AMOUNT of the loan appears as liability for each partner?

Your article suggests that that does not have to be the case, and that each partner can take out their own loan to buy units from the Main Trust.
What my broker did for me was to apply the loan in the Main Trust's name, and have us be joint-borrowers and guarantors. Initially I suggested the same strategy as yours, which I learned from Chris Batten, then my broker said no lender would do like what you suggested (taking loan in personal trust to buy units).

 

[StuartW]

I don't know why your broker said that it couldn't be done. Maybe he/she didn't know.

Stu

 

[Aceyducey]

Woohoo,

Not all brokers know everything.

You might want to consider talking to one who comes closer than your current broker.

Cheers,

Aceyducey