Charles Zerafa Senior Business Finance Broker and Corporate Finance Specialist
Contacted via his website www.charleszerafa.com.au
He is also available on mobile: 0455 662 405
**DISCLAIMER** This is not financial advice - podcast for informational purposes only.
Charles Zerafa shared insights with researcher Sage discussing the benefits of seeking financial advice earlier in one's self-employed journey to prepare their finances for purchasing commercial properties. This high-yield strategy used for scaling businesses & diversification is popular but Charles cautioned that it requires a solid team of professionals and a thorough understanding of the market. Charles also highlighted the importance of seeking financial advice before borrowing from one's super fund, with an emphasis on the tax implications of investing in residential property inside a super fund and how negative gearing works differently for SMSF loans. The discussion concluded with Charles and Sage discussing various strategies parents can use to help their children enter the property market, including acting as guarantors on a loan, setting up a joint trust, and gifting equity in the property back to the child. They also noted the increasing popularity of multigenerational homes.
Finance Brokerage
Charles, with over 25 years of experience, specialises in finance broking currently at Integrity Finance Australia, helping clients ranging from small businesses to international multinational corporations. He explained that Integrity Finance Australia primarily provides finance brokerage services, with a particular focus on home lending and business banking. Charles emphasised his passion for and expertise in helping businesses grow and secure the necessary finance.
Tailored Financial Solutions for Small Businesses
Sage and Charles discussed the complexity of business banking and loans, and how their expertise can benefit small businesses. They explained that small businesses often accept what banks offer, which may not meet their specific needs or future plans. Sage asked about the cost of credit ratings and inquiries for clients, and Charles explained that multiple inquiries can lower a credit score. Lastly, they touched on the high rate of business insolvency in Sydney and how their services could potentially help businesses struggling during Covid
Commercial Real Estate Investment Benefits
They highlighted that commercial properties often have higher income returns than residential properties, and the upfront cost is lower. However, they emphasised that purchasing commercial properties requires a solid team of professionals and a thorough understanding of the market. Charles discussed the possible additional costs involved with large commercial warehouse fit outs with new tenants. The discussion ended with the speakers discussing the challenges of self-employment and gig work, but no specific solutions were provided.
Financial Advice and Super Fund Borrowing
Charles emphasised the importance of seeking financial advice before borrowing from one's super fund, as each situation is unique. He highlighted that there are significant differences between investing in residential property outside and inside a super fund, with different tax implications. The main advantage of a self-managed super fund loan is that it can be used to purchase a commercial property, providing a high income yield. Charles also suggested that it's crucial to have a diversified portfolio and not to commit all funds to a single investment. Sage asked about the eligibility criteria for a self-managed super fund loan, and Charles confirmed that the loan cannot be used to purchase a place of residence, it must be rented out. The discussion ended with Charles mentioning various strategies he has been using to help his clients' children enter the property market, considering the rapidly increasing prices.
Host and Author Sage Godrei
www.onthecuspprod.net
www.polestarhub.io (coming soon)
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