If you are having a problem with the concept of investing for cash flow and developing an unlimited borrowing power then maybe you should have a rethink and read the new Book from Robert Kiyosaki 'Conspiracy of The Rich: The 8 New Rules of Money'

you can read it for free here:

http://www.conspiracyoftherich.com

But of course there is a different way and that is to Buy low sell high and reinvest the profit.

As long as the LVR is <60% most lenders will look at this once you go over 60% you will incur LMI and LMI will place a lot more restriction on your abilities to borrow.
Rather than go to the main banks try some of the smaller lenders like building societies or other second tire lenders you will find then much more accommodating with this type of loan.

your ABN needs to be registered for 2 years if the loan is >60% and one day for some loans <60%

I will Stand corrected, but isn't the ABN a regsistration for GST? you just dont have to declare the GST if you business turnover is less than $75K?

You have to remember when Steve was doing this strategy the world was a very different place money was a lot easier to organize, loans were a lot smaller and where they were buying properties were cheap and easy to rent. so if you have assets that pay for themselves your actual borrowing power is unlimited.
ALso in those days there was the being of the Nodco loans. LVR <60% no risk to the bank, no disclosure of income or disclosure of Assets & Liabilties. this stuff is not rocket science it is just working smart and putting your money and property equity to work for your.
Rish Dad Poor Dad philosiphy If you are going in to debt make sure it is good debt and some else is paying for it and you are making money from it.
These guys were accountants and you will find that the books balanced at the end of the day. though they may have some good stories to tell.

Today the <60% nodoc loan is still there.  And possitive gear property is back on the market acording to Steve. This strategy carries no risk to the bank and all the banks care about is the monthly payment if that is made every months there will be no questions. especially if they have a portfolio of properties with an LVR of <60%. the only restriction here are the amount of properties per area.
of coarse this is only my opinions and is not to be taking as advice LOL

this was just a scenario never to be used as advice

And Noted That "all parties must be in agreement". Or should It be said that the terms and conditions need to be set out in a fully signed and witnessed legal document set out by legal representation. starting that the age patent are of sound body and mind and want to help out their child.

Hi Jo
The only way you have any hope of doing this deal is going directly to the NAB rural section, if you really have your heart set on doing what you say here, then they are possibly your only hope that will look at you.
They will want to use the equity in the IP toake over the loan and cross the two properties to keep the land loan down under the 60% LVR or lower.
with a 100 acres tell the bank you are going to use it as a hobby farm and dont mention anything to with owner builder,and you will have a chance at getting it through

I know this because I have some friends who have just completed doing just this and  this the way they told me they had to do it,

Hope this helps

Cheers
 

Elka

I agree with Richard about offset accounts and the loan structure of a basic mortgage for Alex.
I never recommend off set accounts to anyone you are far better off putting any extra money straight against the principle in a free redraw facility making sure you have direct access to that money at no cost.

I never deputed Richard's credibility as a MB I have been reading alot of what he has been doing in here and you guys are very lucky he has decided to devote his time and we should all thank him very much and say nice things about him to keep him coming back his knowledge is invaluable to us all,

On this matter the only thing I would change on what Richard has said about is the Type of product.Unless you are intending to move large and contentious amounts of money in and out of your account there is no need to use a LoC If Alex in the future wishes to buy IP then a new basic loan would suit the purpose and be far more cost effishent.  

Anything over 80% will incur LMI, when they are involved they want to see where the deposit money is coming from and want to see records of genuine savings. you can pay up to $10,000 for high end LVR loans over 95%. the old Rams were good for this as they were able to over come the LMI problem by providing in in house Mortgage insurer but now they have lost that facility they have to conform with genworth and PMI conditions that means no more 100% loans and this is the same with Guaranttee loans the terms and conditions placed on these loans by LMI make it near impostable to get through.

OK what are your options?
looking at property value between $370K – $380K
Income – $80K before tax.
No deposit
Good work history

Assuming
PAYG
clear credit.
single no dependents
borrow capicity at todays rate $500k
Retired patents with unencumbered property.

Scenario

Patents take out a lo doc investment loan LVR <60% purpose of the loan is for future investment
Borrowing amount to fund 20% deposit. at such a low risk, LMI is not involved and bank will ask no questions as long as they get an account with a direct debit set up for the monthly payments. this can be in anyone name as long as the payment is made the bank won't care. There are still lender offering these type of loans. It is far easier than setting up a reverse mortgage.

Now you have your deposit you can purchase your property and set up an 80% loan basic mortgageand pay no LIM.

If all parties are in agreement you will have your home and quite easily be able to pay for both loan no questions asked, simple process when you take out LMI.

think outside the box

Cheers

Sorry for assuming alexz1011 is a young person. When mentioned "just started work and Dad will help me"
and  In my defense: yes you are right any bank will jump at this LVR only thing that may be a hiccup is the work history. But I have found that the banks do put different conditions on younger applicants.

[If your Dad is willing to put up the money and for your to get the FHOG he will need to certify a letter signed by a solicitor or a statuary Declaration signed by a JP, to say that he has gifted the money to you and requires no repayments in return.]

Sorry this should read: [If your Dad is willing to put up the money and for your to get the FHOG then fine.]
[Alex will need to certify a letter signed by a solicitor or a statuary Declaration signed by a JP, to say that he has gifted the money to you and requires no repayments in return.] thank for pointing out the typo i will be more careful in future.
Yes you don't need the letter to apply for the FHOG but it is a save guard to prove where the money came from.
But if you are looking for finance you will most certainly need this letter just in case they ask where the money comes from.

Alex I do not know what the circumstances are to why you are wanting these particular properties at this particular price range, and  I will strongly recommend you not go into debt if you can help it, where you have to pay for it. If there is nothing set in concrete may I suggest rethink your strategies and options for a purchase price of $360K + $14K++ = $380K++ plus, your $40K can be used furnish the house and move you in. then look at taking out a loan when you own the property and use that as a deposit on a IP as Richard suggested. But I would use a basic mortgage rather than an LoC.

Now we have found out that Dad is going to fund only up to $360K and and your heart is set on this price range then you will need finance. Find finance for the full amount required $70-$130 and use the $40 to move in. Then anything left over put it back in to your mortgage.
Product recommendation, would be a basic mortgage with one of the 2nd tire lenders that has no fees, free redraw and allows you to makes extra payments at no cost. Even though these are P&I products they can almost be use like a LoC but at a much lower rate.
Ask the mortgage Broker you are going to use if they know of these products and if they stear you away, go some where else that will do the right thing by you.

Cheers
  

What will kill this deal and what has kill most of these 100% lend deals is not so much the banks as the Mortgage insurer. Both the mortgage insurers Genworth an PMI require evidence of 3% deposit and 3 months of saving history. Any thing to do with LMI above 90% is becoming a costly nightmare.

 Saltiimbanco you have a $110K income and if this is a single income no depends you have a borrowing capacity out to $550K now include your debt of $240K that reduces you down to $310K I don't know who told you you can borrow out to $600K I strongly recommend you rethink your investment strategy.

Here's an Idea. Spend less than you earn and use that extra money to clear debt. Once you have cleared debt set up a savings plan to generate a deposit, aim for at least 20% +costs. This may take you some time but it will give you a good solid foundation to work from.