Starting out in CIP - Questions

[kev007]

I'm thinking of having a dabble at CIP. I've read through the posts and am trying to work out what is required to start out in CIP. The notion of a tenant paying all outgoings sounds appealing.

A few questions:
1. Do you need an ABN to invest in CIP and is the reason for this that you are dealing with/invoicing a business?
2. Do people buy CIP's in their own name or set up a company and buy the CIP in the companies name.
3. Do you ask the normal bank man for a loan and is it as straightforward getting a loan for a CIP as for a RIP?

I won't ask questions about what to look for / yields / contracts etc as there seems to be plenty of info on this forum about that sort of stuff.

Cheers in advance,

 

[Aaron Sice]

here's a link i found to be very useful for a complete n00b like me.

cheers.

http://www.netlawman.com.au/info/negotiating-business-property-lease-australia.php

 

[JIT]

here's a link i found to be very useful for a complete n00b like me.

cheers.

http://www.netlawman.com.au/info/negotiating-business-property-lease-australia.php

Thanks BC, that was very useful.

 

[kev007]

Hi Blue Card,
Thanks for your link.
Are you able to give me any guidance as to my three questions?
Cheers

 

[jrc]

ABN - not necessary to register for GST if turnover below a certain amount. Need an ABN otherwise your tenant has to withold tax. Practically you have an ABN and register for GST so that you get back the GST on the purchase price or so that you can come within an exemption of purchasing a going concern.

Do not buy in a company name - no 50% discount on CGT after 12 months. Possibly use a trust but bear in mind the law is unsettled due to Bamford's case which has been given special leave to ppeal to the High Court.

You can go to your bank. There will be different LVRs and interest rates. Also a lot of commercial loans are for shorter terms P & I, which can be crippling on cash flow. A broker would be able to give you a better idea of what is available