Building a property portfolio with structured finance

Building a property portfolio with structured finance

The fastest way to build a property portfolio through correct finance structuring so the finance industry incorrectly focuses on just one thing that is the lowest interest rate so often you know people are looking for the lowest race or you know what is the best deal for them or what they think is the best deal for them even though they might not even qualify for

It yeah even though they might not qualify for that lowest rate or that best deal out there so you can really go on to the google search and put put in lowest interest rate available on the market so you know this leads to a couple of things so you know people be focusing on the lowest interest rate you know they’re just really focused on university knowing their

Borrowing capacity that’s their ultimate goal with any bank with any bank and they get handcuffed because of more often than not they are put into finance arrangements such as cross-collateralization which ends up costing them much more down down the tribe because it’s risky finance searches just imagine the risk of being within cross-collateralized which means two

Properties being tied together and not being able to buy another few properties just because the lender wouldn’t release the equity yeah just because you wanted the lowest rate you end up in that scenario you may have your home loan with the wrong bank because you know it may not really support your needs and your goals or your aspirations of being able to build a

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Property portfolio have that financial freedom that you’re looking for through property and you may be stuck because of how poorly it’s set up from a tax perspective so you cannot borrow further or not have the tax pay tax efficiency yet well a lot of the time so you know a lot of people that we speak to you know they are looking for that lowest rate but what that

Leaves them – is you know being stuck in finance arrangements that will really hamper their chances of being able to grow their belt through property so what we suggest you consider doing differently is first let’s look at what your goal is where do you want to be or do you want to buy multiple properties or do you just want to buy one property sugar do you want

To build a million two million three million dollars property portfolio and then work out with your investments i mean mortgage broker as to whether it’s a possibility for you what numbers should you be targeting because if you have the resources let’s say for argument’s sake $200,000 in equity right now how many properties can you buy with that what should be the

Minimum rent on those properties with your resources and your income yeah and then you need to politically look at how efficient or tax efficient your lauren structures are so obviously you do need a good tax accountant on board who could assist you with that however you know the way the loans are to be structured it needs to make sure that you’re maximizing tax

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Efficiency and maximizing your borrowing for the long term in going to lenders in a specific order so you continue maximizing your borrowing capacity on one purchase and then be able to do the next one in the one after that it also it’s important to look at how you can minimize risk as we talked about cross-collateralization earlier how do you avoid that how do

You treat each property independent of each other and yet so ultimately you know if you do have the desire to be able to build a property portfolio and you want to do it the correct way through correct finance structuring to you you know anything so you can maximize your tax efficiency and minimize risk then there’s a correct way of going on about it you know when

People move from one property to the next and the one after that there’s there’s a method to the madness yeah and if a of their home loans fast and still be able to accumulate investment properties to the so the gist of this is people focus on the pricing or the interest rate first and then they get the lender and then structuring when in fact the structuring piece

Needs to come up front and then you consider you know a rate which lender you go to is further down the list in the right way of doing things hope this helps and we look forward to speaking with you soon you

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Building a property portfolio with structured finance By Property Twins