When I was introduced to this client about 3 months ago. We had a brief meeting to discuss their plans. Based on the financial information they provided me they were in a very good position to buy an investment property.
On a Thursday they called me – they had put in a offer that was accepted. They wanted to move quickly to secure the property. They came into the office that day and we discussed what needs to happen. I enquired about tax returns and business structure. He was trying to explain his businesses when I realised it was not going to be straight forward. I downloaded his credit file to discover he was director of 9 different companies!
I need to talk to the accountant as the lenders would need to see the tax returns for all of the companies. The next day was four hours of tax return after tax return studying. I got my head around the businesses and the flow of money. As I was getting my head around the structure I drew a mud-map. In the end there was 9 companies and 5 trusts. Funds were going everywhere!
I presented the mud-map to the clients. The wife was particularly pleased as she had never full understood the flow of cash and all the different businesses. Using the mud-map I was then able to explain to the chosen lender how much money was coming in and therefore they could afford the loan.
We had approval by the end of the week!