Jane and John were a successful couple. They owned their own home and had an investment property. Their combined household income was $240,000 with additional rental income of $30,000 per annum. They had a mortgage of $900,000 over both properties.
They had also accumulated some additional unsecured debt which was:
- A car loan for $36,000,
- Credit cards $18,000
- Personal loan of $15,000.
Their total monthly payments including their mortgage were around $8,000. Although they weren’t struggling to meet repayments, they were concerned about their financial future as they did not have a large amount of savings. All their wealth was in their property.
Their key objectives were:
- Increase savings (via increased cashflow)
- Repayment of mortgage on their own home
- Increase wealth via another investment property
We reviewed their scenario and provided the following solution,
- Refinance both their properties
- Consolidated all unsecured debt saving them $12,000 in interest and increasing cash flow by $1475 per month (increased cash flow and savings)
- Withdrew an additional $250,000 from their property (wealth outside the property)
- Helped them buy another investment property for $670,000 (increased wealth and became more tax-effective)
Sarah and Sam were a financially prudent couple. They were in their 40’s and were financially healthy. They owned their own home and 2 investment properties. They had a mortgage of $1.5m against a combined property value of $2.3m. They did not have a lot of savings.
However, they were concerned about retirement as they did not have enough super to retire on. Currently, between both, they had $200,000 in their super. The key objective was to invest their super so they can have steady cashflow in their retirement.
We reviewed their financials and setup their Self-Managed Super Fund. We had a joint meeting with our inhouse financial planner and recommended the following,
- Purchase of 2 commercial properties which were for sale at $600,000
- Rental income from the properties were $40,000 + CPI increase annually
- Based on the rent and their contributions they would have the properties paid off within 9 years.
- This meant that at retirement they would have a steady cashflow of close to $50,000 per year coming in.
Sam was a lawyer and had his practice for over 10 years. Clients were steady and business was good. However, he now needed to move his practice as his current lease was running out and the landlord wanted to use the premises. This was the 2nd time in the last 10 years. Moving was very disruptive to his business. He did not have enough capital to purchase a premise but thought there must be away.
Sam and his wife had $270,000 within their super. We used their super to purchase a commercial premise he could operate out of. Although you cannot live in a residential property owned by your super fund, if you are self-employed you can run your business from the premises. This meant Sam would never have to move again.
The XYZ Company had been performing well in the last few years. However, in recent times sales had fallen and they required funding for further investment and marketing. Cashflow was tight but they did own the building they operated in. The business owed the bank $2.5m and the value of the building was valued at $6.0M. Their taxes weren’t up to date and it would take a few months for the accountant to prepare their latest returns, they needed the funds now.
We reviewed the situation and needed a lender and a product that was asset-based rather than income-based. We found a lender that could do a commercial loan at 50% of asset value with only BAS returns for the last quarter. We were able to get the business $500,000 within 1 month so they could use the funds to invest more in the business and get more profitable.
Names and identifying details have been changed to protect the privacy of individuals/organisations.