Starting off correctly - help with structure and finance options

[fab365]

My situation is as follows, Im a permanent resident (based in WA) - newly arrived to the country - currently employed (PAYG) but still on probation period...(currently has an effect on me obtaining higher LVR loans...)

Currently have about 150k to invest and would also like to put down some roots down in terms of a PPOR - so that is my sum total for both

So my objectives are:

1) Obtain a decent primary residence - attempting to get something under 500k or slightly over to maximise first home owners grant and stamp duty savings (struggling with this aspect where we are in WA - and what suburbs we would be able to get into initially - but could be converted to an IP later on)
2) Have enough left over (cash reserves) to start my investment process / portfolio and ensure that banks would look kindly on me in terms of loan serviceability.
3) Structure it all correctly from the start - so as to ensure future loan serviceability well into the future

My initial thought processes were to purchase the primary residence in own name, and to attempt to minimise the initial outlay of cash - do not mind spending LMI (hopefully capitilizing it) - and potentially to purchase first property as an initial live in abode (would have to do it for at least 6 months anyways bcos of the FHOG) then convert this property to an IP - and potentially have to purchase another - or just revert back to renting for primary residence.

Any suggestions on how to effectively achieve my goals regarding the structure (specifically interested in responses to this) , and how best to go about financing it all (i.e. in my own name initially / name of trust etc.)

Any good references of who to talk to within WA regarding structuring? Most of the posts seem to suggest NSW and QLD contacts - so would like someone local

Any comments appreciated

 

[Aaron_C]

fab365 - being on probation or new to this country doesn't preclude you from getting higher LVR loans. Quite easy in fact if you have strong income and strong assets.

 

[Terry_w]

Broadly.

Gift money to a discretionary trust.
Borrow back from trust and
Buy in your own name with 80% loan. money parked in the offset.
When you decide on a new purchase for investment
Put excess money into loan to pay it down and reborrow using a new split.

This will reduce your non deductible debt and keep your cash available as long as possible without paying down the loan (in case you move) and will maximise deductions once an investment is found.

 

[fab365]

Hi Terry

Would prefer to not go down the route of an 80% initial loan... would actually prefer a 95% LVR if at all possible - thus keeping some of my funds for future deposits etc.

Im assuming your scenario allows me to offset any rental loss (for the time that I am renting the primary residence) against my income.

Obviously as I need to stay in the residence for at least 6 months within the 12 month period, I might just do that for that short period, but would then want to revert the property to a IP.

What exactly is the 'new split'?

 

[Terry_w]

Hi Terry

Would prefer to not go down the route of an 80% initial loan... would actually prefer a 95% LVR if at all possible - thus keeping some of my funds for future deposits etc.

Im assuming your scenario allows me to offset any rental loss (for the time that I am renting the primary residence) against my income.

Obviously as I need to stay in the residence for at least 6 months within the 12 month period, I might just do that for that short period, but would then want to revert the property to a IP.

What exactly is the 'new split'?

Yes, good idea on the 95% LVR.

New split means new loan, don't just reborrow using redraw.

 

[Aaron_C]

95% is a pipe dream if you are on probation imo, especially since you do not seem to have an employment track record in Australia. 90% is achievable though.

 

[fab365]

Yip - 90% is pretty much what seems to be offered to me ... thought there may be some alternative lender that may consider a higher LVR.

Have been in the same profession for 14 years - but still lenders are wary, as you say - of my Aus track record. I reckon I just have to start off slower then expected then ...