How To Buy UNLIMITED Properties! Serviceability / Borrowing Capacity HACK 2023 🐱💻
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- čas přidán 25. 06. 2024
- Are you struggling with Borrowing Capacity? 😣
You want to buy more investment properties but the banks won't loan you more money? 😫
Well EXCITING NEWS! 🗝️
Here's the key to obtaining finance WITHOUT it affecting your serviceability 🤯
99.9% Property Investing don't know this strategy and get stuck after just a few properties.
No lies. You really can buy unlimited residential properties and increase your borrowing power every time that you do 🏠🏠🏠🏠🏠🏠
But wait, is this too good to be true? 🤔
Let's find out!
0:00 - Introduction
1:05 - How to increase your borrowing capacity?
5:57 - Banking legislation can change overnight
7:49 - How to save yourself from a change in borrowing capacity?
13:40 - Who is this high-risk strategy suited to?
15:39 - How to stop the House of cards effect?
20:51 - Do you really need to buy that blue chip property?
25:44 - How did Jeremy increase his income?
30:03 - How to approach the concept of having Buffers?
32:03 - Jeremy’s advice on changing interest rates.
36:43 - Conclusion
LEARN MORE 👇
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Another great video :) Thanks for that PK. So if I understood it correctly, i can buy 5 positively geared properties under 5 trusts i am member of? So when I buy a property worth 500k under new trust, trust has no income before buying property, on what basis bank will release a loan for 500k and on what LVR? And eventually initial deposit would come from a member of the trust and not trust itself?
Super insightful, thanks PK and Jeremy.
Love this! Not suited for everyone. But yes trusts aided with the right accountant is another great avenue! Jeremy is my personal accountant as well!
Enjoyed this PK - Jeremy is a whizz! So impressed listening to him.
My thoughts having seen this over the years too: the strategy doesn’t work all that well if one has accumulated in personal names first. In this rate environment it generally soaks up servicing capacity, which is required to implement this approach.
I.e. you can’t buy 5 properties personally, get stuck on borrowing capacity and then begin this approach.
When applying for the loan for the 6th property in the new entity, they’ll take into account your personal position, which shows 5 properties in personal names and lots of debt.
I.e. it can force a personal deleverage to begin utilising this approach.
Jeremy touches on the right investing strategies to implement this plan, generally active strategies not long term buy and holds.
Your questions were brilliant too PK, great work educating in an informative real way and outlining risks to approach.
As always Redom your thoughtful comments add significant value to any post or video
Probably your best video so far. Lots of insights.
Good interview. Good questions asked PK.
Excellent ! Last tips from Jeremy for the investors was awesome advices 👍👏
Very insightful conversations. thank you PK for sharing :)
Thank you, very informative
Thank you. Great interview and information for the time given. Helpful and well rounded information including some cautious comments. Great to hear about buffers, possible policy changes, some historical perspectives and wisdom and the sensible recommendation about buffers, strategically buying and moreover strategically selling. Key info we need though to do our property maths(!) Is the interest rate on such loans (and who from) or differential to standard resi products given rates are different every month this video is watched, and what LVR is possible (not that we would likely use a high one given the interest burden would be too high versus the net rent)? And, what else do we need to know about what you can or cannot do with such loans eg purpose and refinancing?
Can you do a compare and contrast of normal resi loans to trust loans to smsf loans? This would really useful. Thank you again.ù
A great insight on property investing. Appreciate it.
Pk I was listening your podcast, I fell asleep and woke up with 10 properties in my head. 😅
Hahaha
😁😁😁🥰
Which episode? I’m keen to replicate this strategy!!
YES! PK & Co., you have no idea how much value your providing your viewers. Total game changer for me and my husband as we’re almost tapped out 🙌🏻
I’m glad! But be careful of the pitfalls!
@@AusPropertyMasteryWithPK would be good to understand your lending strategy after your first 5 properties. Understanding when you bought may have different rules and considerations to the present day.
Another great video thank you
Hi PK
I have watched a lot of videos on property. Definitely Jeremy’s advise is the best and make sense.
Good on him! And thank you for inviting him.
Thanks some good strategy tips there like the buffers
Hey PK. That was a amazing. Love to hear more. Thank you.
Thank you!
Brilliant episode!!!
Extremely valuable content 👏
The best property advise I have heard till this date, wow
Good content there Pete. Would love to hear more about breaking barriers and beliefs of asking for more during your conversations. I find it very interesting by using specific words like "because", have shifted the conversation for a greater outcome. Looking forward to listening to more of your stories.
This is truly valuable stuff that every investor needs to grasp to move forward. Well played gentlemen.
Great options, I always work on P and I repayments from day one, you can still have it positive just need to find the correct property.
Great interview, I've got lots of values out of it ❤.
This was a great video mate
Yes. More of Jeremy please
excellent interview. very educational. whether it is applicable or not it is amazing to have this knowledge. i had discussion with my accountant recently and he has no knowledge or experience with these types of structures. i will be reaching out to these guys soon.
yes, Great value added discussion. I would love to have more content on this. Especially the cost of maintaining the trust, when to exit/dissolve the trust and the tax implication etc.
Speak to your accountant, it will vary depending on local in my experience.
Noone of this advice is anything new for a good accountant
Very insightful discussion PK. Answered so many of my questions.
Loved it mate..
Thanks brother
Glad he mentioned the important considerations RE land tax and accounting fees.. no land tax free threshold for a trust and accounting fees for each trust may deem accessing extra finance less economical
Yes! ty
So much value in this video
Cheers!
Yes fantastic contents 😊
Great value!
Know your numbers!
Cheers, Jeremy is great
Really great insight to topical questions. Thanks PK and Jeremy.
Glad you enjoyed it!
Brilliant info thanks!!
Interesting...
YES!
Hi,
What do you think about rent to buy? Advice please 🙏
Yes ! Great content PK. This was something I was waiting for so long. If my plan is to acquire 4-5 properties and I know my borrowing will be maxed out after 1st or say 2nd property, then why not start with the legal entity structure from day 1 ? I felt that during the video you had your reservations on this lending structure.
Thanks PK.
Yes I asked this exact question in the episode ! Yeah tread carefully
@@sshz44 the mortgage brokers I give you cover everything .. lending changes monthly
This guy is on the money , very very intelligent .... As a property investor of 25 years now , I think we are in a totally different financial cycle , one of which could destroy generational wealth, I am very cautious moving forward and I think patients will pay, I believe the winners moving forward will be the ones who have no debt or very minimal debt....
Burn inflation erodes debt, and eroded cash in the bank.
Which do you want to be eroded?
Yes
Definitely stuck with finance 😢
Wont each trust which have considerable accounting fees etc negate the positive geared properties ? Best to keep it in 1 trust and be mindful on the properties you buy
Yes! Please invite Jeremy back on your show PK 🙏
Any rough costs to set up a trust? I understand it is about $2-3k. Thanks!
I am curious about the trust meeting its own obligations. If it is formed for the sole purpose of purchasing the asset is it correct to assume that they (banks) are assessing its ability to meet its obligations solely from the income derived from the asset purchased? If this is the case how is the deposit entered into the trust? Wouldn't a deposit come in the form of a loan from a director or beneficiary (an initial cash injection)
Can you give insight to which lenders? The brokers I have checked have come back with nothing
Great content PK and thanks Jeremy. You did not mention anything about how can you extract any income from the trusts? Also is there a right time to exit the trust?
Good points for next time
Is there a recommended limit to how many properties can go into 1 x trust prior to establishing multiple trusts?
nice video!!! what are the banks doing this type of loans?
Westpac, and a couple others I think, very select few that may change their policies and have you stuck in the future
Yes please PK.
Interesting, however accounting professional bodies have warned against issuing such accountants letters
Why would you put each positive geared property into an individual trusts. If there positively geared put numerous properties in the one trust keep fees down and will allow you borrow more money for additional property. The banks will still want financials of the director/s
Yes. Jeremy is great. Does he have a channel PK? Thanks
I don’t believe so, could be wrong.. google?
Does it have to be a trust? Can it be a company?
Very good informative session. PK i noted your other guest that discussed Trusts this year recommended setting up the Trusts right from the beginning of the investment journey to preserve your borrowing capacity because it gets very messy and expensive to change later on. What is your view on this for beginner investors? Is it better to get your first couple of properties in your individual names and leave trusts for sophisticated investors??
Yes I think if you’re gonna do it best to do it from the start.. but of course everyone’s risk appetite is different
You still need equity, these days a corporation seems like a better vehicle for repayment of the property
There’s also the overhead of the trust or company which gets added to your cost
It’s very easy to over complicated a structure
They still need personal guarantees
No CGT discount via a property, wouldn't suggest holding growth assets in a company structure, only high yield at the very best
What about purchasing in companies rather than trusts? Trusts seem to attract a hefty land tax, whereas companies seem to have the larger threshold.
Biggest disadvantage is no 50% CGT discount. Land tax will be more economical in a longer run.
YES!
I bought my second in a trust. I didn’t realise it needed to be positive cash flow - why is that?
Your bank will consider it a liability and deduct it from your income if it's -vely geared. As a result, your borrowing will be reduced. The idea is to get a letter from accountant that it is self sufficient and not a liability on you, Thus, keeping your borriwing capacity unchanged. The property must be +vly geared to get that letter.
PK, I’m interested in doing your course , how do I do this please , I have finance and everything in place , already have 2 properties, and I know what I’m looking for, but I don’t know where to source this data cheers , love your shows Rick
Hi Rick, please see the website here:
consultingbypk.com.au/
All the info is there. Feel free to email me any q’s info@consultingbypk.com
What the benefit of interest only, over P&I?
A whole different video on it, pls search it
If I set up a Trust or a Company and the Structure does not have any Income , in that case how will the Bank assess the serviceability for loan purposes?
Any takers?
Can you have a trust if you don't have a family to be trustees?
Yes! A unit trust
short of having 40% deposit, how do u guys find a property thats positive cash flow from the get go? i personally would love to hear a deep dive into that?
It’s harder now.. 20% deposit.. plus 7+ percent yield .. that’s my bugbear with this strategy
@@AusPropertyMasteryWithPK Hi Pk, with current interest rate and other costs, It's probably 70% LVR now :(
Not really a hack is it. You still need to provide evidence of income and rental income is assessed differently by the banks.
Im in Victoria and felt the “not friendly to investors” in my soul 😂😂
Well, almost immediately, we see that a trust would need a house close to 8% gross yield to work. And that's going to be hard to find, without going Nathan Birch style.
Not untrue. And that style is laden with risk
What is the Nathan Birch Style? 😂
@@mrsurryhills2165 Basically someone who used to buy distressed regional property, often vandalized or half burnt down, do it up cheap and quick, and rent it out at perhaps 10% plus purchase price.
He's controversial. I think he's still banned from the Somersoft (Now property chat) forum.
@@mrsurryhills2165 He's an interesting character. Check out his CZcams.
Depends what the interest rate is and how much cash equity you can throw into the deal (including stamp duty etc) to bring down your weighted average cost of capital to be below your net rent.
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