- Ensure you have access to a US attorney to review the contracts for clear title

- Arrange Title Insurance

- Have the correct lien searches conducted

- Make sure you have the property contract you use has been vetted

To start your own USA property portfolio, go to:

http://www.keystosuccessclub.com/property/usa-property

About Mark Taylor….

The USA property market – Risk of legal Issues

Technorati Tags: Investing in USA property, legal issues, USA Property Course

Of course, there are risks and complications to be aware of, and yes there are certainly Australians who will get burned by taking shortcuts.

Here is an article from the Sydney Morning Herald that raises some fair risks, although as with the media it is very one sided!

SMH article

Here are some of the things to be aware of:

• Buy over the internet at your peril.  The house may look good but what about the area?   Make sure you can get insider knowledge for the region, the neighbourhood, the type of tenants and the vacancy rates
• You need to have access to a reliable property manager as tenants have a lot more rights in the US and it is not as sophisticated as in Australia.  Picking up cash in an envelope is still a common practice!
• Make sure you have the right structures and bank accounts set up so you can handle the US and Australian tax side of things easily.  Leaving this to a qualified accountant is the best option
• Know your strategy; don’t put yourself in a position where you need or expect to sell.  You should be investing for the medium / long term!
• Getting US loans will give you much improved cash on cash returns, but it is more complicated than Australia with each state and each bank having different criteria
• Don’t forget the basic principles of property investing and make your money on the way in and look for a long term strategy.  We don’t expect capital growth for a number of years…

To start your own USA property portfolio, go to:

http://www.keystosuccessclub.com/property/usa-property

About Mark Taylor….

The USA property market – The risks and complications

Technorati Tags: Investing in USA property, risks with USA property, USA Property Course

The new issue of Success Insight is now out.

 http://www.keystosuccessclub.com/newsletter/2010/December2010

Let’s find out what’s in store in the Property section of Success Insight, December edition…

• The secrets of successful investment in “Off the Plan property” by Munro Cohen, MD of Whiterock Capital Partners
• Free Info pack outlining how you can successfully invest in the
  US property market as well as the opportunity to speak one on one with someone who has recently bought 8 properties in the US
• “How to avoid the 5 most common risks when buying real estate”  from our newest expert panel member, Michael Poynter from MCP Group
• Australian Property Market Forecast 2011 from our expert panel

http://www.keystosuccessclub.com/newsletter/2010/December2010

Enjoy!

About Mark Taylor….

Success Insight December 2010 is now out!

Technorati Tags: Keys To Success Club, Property news, Success Insight

By Michael Poynter

Overview

Changes to super laws in late 2007 allow borrowing within the superannuation environment. This is starting to gather some traction in the marketplace, with increasing numbers of commercial and investment properties being purchased.

Previously, in line with the inherent purpose of super to invest for retirement with minimum risk, investors were not allowed to borrow against assets owned by a super fund.

Now it is allowed via a slightly complicated structure – a new custodial (bare) trust specifically set up to own the property, where the sole beneficiary must be a self managed super fund.

To try and limit the risk to the core super concept of investing for retirement, a lender of funds can have a mortgage over the property, yet cannot have any recourse to other assets of the super fund.

When is Borrowing Acceptable?

When…

1. The borrowed money is applied to the acquisition of an asset;
2. The asset is of a type which the Fund Trustee is permitted to acquire.
For example, it could not be an asset that the Fund Trustee is prohibited
from acquiring from a related party under s66, or an in-house asset that
would result in the fund exceeding the allowable limit for in-house assets
under s71;
3. The Fund Trustee is not the legal owner of the asset. Instead the asset
must be held on trust so that the Fund Trustee acquires a beneficial interest
in it. We can refer to the legal owner of the asset as the “Custodian”;
4. The Fund Trustee has the right, but not the obligation, to acquire legal
ownership of the asset by making one or more payments after acquiring the
beneficial interest ; a n d
5. The lender’s rights against the Fund Trustee for default under the
loan are limited to rights in respect of the asset only (i.e. the borrowing is
limited recourse).

About Michael Poynter….

Using Self Managed Super Funds for Property Investment

Technorati Tags: property investment, self managed super funds, SMSF

I am pleased to welcome on board Michael Poynter, principal Solicitor and Director of MCP Group.

Michael has joined to become our resident Melbourne legal expert.

Mike has been a practicing lawyer in Melbourne since 1989, and currently heads up MCP’s team providing legal services to individuals and small businesses. 

The legal services include Commercial and Small Business Law, Property, Asset Protection, Estate Planning, Family Law and Litigation.  In addition the team supplies a range of personal services, including Conveyancing, Probate and Estate Planning.

Michael Poynter – MCP Group

Technorati Tags: conveyancing, MCP Group, Michael Poynter, Property legal

By Chris Gray

Accountants: A Valuable Asset

Technorati Tags: accountants, Chris Gray, property investment advice

Hi there,

We have finally received a time for the council to do their property inspection to see what needs doing to bring the properties up to scratch in terms of new regulations and strata title into two separate units.

My surveyor called me and gave me the contact details of a fire safety specialist who can give me some options that may produce a way round the need for any building inspections.  Let us see what happens?

In terms of the process, a quick refresh at who I engaged and how much the process is costing as some of the bills are coming in.  My lead has been a surveyor and they are costing $2,500 for the whole process.  They do all the plans and council submissions and will need access to the place

You also need to engage a solicitor or conveyancer; careful on this front as they often charge by time and not a fixed price so can catch you out.  Will let you know how this works.  These guys set up the legal stuff like a coporate body.

I am also likley to have to engage a third to run the corporate body as I don’t fancy all the paperwork.  Again will let you know the final tally as we go through the process.

Fingers crossed on the council inspection!!

Technorati Tags: property investment Mackay, strata titling units

Hybrid trusts continue to cause confusion in the market.  I wrote a post about this previously, but though I would dig up some more relevant posts for those of you who wanted more information on this tricky subject.  Remember to weigh up the pros and cons depending on the situation and if you think you can use trust to get around paying tax then you are very dangerous ground!

Hybrid Trusts – Where are we now? Where are we going now?

Hybrid Trusts, as the name suggests, are a combination of a Discretionary Trust and a Unit Trust. Unit holders are entitled to fixed income and/ or capital. However there is still a lot of flexibility for the Trustee to deal with the …

What is a Hybrid Trust? By Melissa Gordon At Isnare.com Ezine Articles

Title: What is a Hybrid Trust?, Category: Legal, Author: Melissa Gordon, PubDate: 2009-07-19.

Technorati Tags: hybrid trusts

A Hybrid Trust is a mix between a unit trust and discretionary trust.

You borrow money in your own name to subscribe to units in
the Hybrid Trust. The interest is deductible against the rental income
distributed to you by the trust.

The issue the ATO have with a Hybrid Trust is where units are redeemed for
their face value as the property becomes positively geared. They also attack
these trusts where the units are redeemed so that any capital gains can be
distributed on a discretionary basis.

From an asset protection point of view, the increase in value of the asset
will be free from potential creditors. In the case of bankruptcy the units
held, are assets of yourself and could be redeemed for their face value.
This will generally pay out the loan and as mentioned any increase in the
properties value will remain within the trust.

In regards to costs, depending on the costs expect around $2,500 set up with ongoing fees a similar amount.

Trusts also restrict your financing abilities as some of the banks restrict trusts from accessing certain loan products.
Setting up a Hybrid Trust is not without risk from a Tax office perspective,
and is generally for people who have high income levels and are involved in high risk activities such as operating a business  and require a level of asset protection whilst maximizing tax benefits.

Technorati Tags: Asset Protection, Discretionary Trust, Hybrid Trust, Trusts