Family Strategy
Helping younger generations
Self-directed parents helping two children buy
Helping Younger Generations
Self-directed parents assisting children enter the property market
$3MInterparty equity release
- Referrer
Wealth Advisor
- Deal size
- $3m total:
- $1.5m equity release on investment property 1
- $1.5m equity release on investment property 2
- Challenge
- Two adult children could not service debt in their own right to enter the market
- Parents did not want to gift funds
- Strategy
- Used parent’s unencumbered property to release funds
- Funds then lent to children to buy property, interparty loan agreement set-up to repay parent’s loan
- Children had responsibility to make repayments
- As income increases over time, children can draw equity from new property and pay down interparty loan
How it came together
Allowed children to enter the property market and also be responsible for repayments.
Over time, loan will be repaid by children by increasing debt on their property.
Client details are withheld by agreement. Figures are from the engagement.
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