Ah – this is a South Australian purchase?

Depending on the agent, some will have a Form1 available from day 1, others will only order them once the property is under contract.

Note either side can pull out until form 1 has been signed by both parties and then the two day cooling off commences.

If you wait for form 1 you WONT meet the 18/12 deadline easily.

Switch your existing investment property to interest only – you gain no benefit from having it structured on P&I. You can then just store the extra funds in the offset account.

Otherwise you’re potentially putting tax paid cash into investment debt, which is a bad habit if you’re ever to buy a PPOR, as you’ll want to have the PPOR deposit as large as possible.

If you’re looking at purchasing an investment property at 95%+LMI cap on top of this, you’re not going to have much luck. I’d seriously suggest you consider whether it’s worth just waiting a the very short amount of time it would take you to increase your deposit to cover a 90% LVR. You’ll limit your LMI costs, potentially avoid a second credit hit from a mortgage insurer and any future gain can be released as equity, instead of having to wait on the sidelines for the LVR to drop below 90% from 95%.

josig wrote:

Thanks for that, and for answering my other question…I know everyone says they can work with interstate clients etc but isn’t it easier to be able to sign and exchange docs etc in close proximity? I have always used people I could visit face to face but happy to hear if I am limiting myself unnecessarily!

Most brokers run everything via phone and email – I’d say less than 1 in 100 client’s will bring in physical documentation these days for their loans, likewise the loan contracts are sent straight to the clients door with a reply paid envelope.

A quick look at our CRM, almost 75% of clients are outside of South Australia (where our office is located) – in this day and age it’s all about finding the best person to work with, not necessarily who is geographically close.

Welcome to the forums Barlow.

My best piece of advice early on is to establish a goal! The best way for you to start investing is to know what your end goal is, and then this should highlight the options available for you to achieve it. Whilst doing this it’s a great idea to form relationships with the right professionals – accountant, broker, buyers agent if necessary etc.

I’ve written an article on working out your plan from the start – which might be of assistance to you: http://www.precisionfunding.com.au/planning-your-investment-strategy/

Running multiple projects simultaneously is a great way to go bankrupt – which is why the lenders won’t be too keen to lend.

The % change of failure causing multiple developments to collapse like a house of cards is a risk which you should be considering.

Generally if you’re wanting to complete multi developments simultaneously, you’ll need to have a strong cash buffer and income to get to that level – can’t go 0 to hundred.

Then get yourself in front of a finance strategist then – otherwise whilst chasing rate, you might put yourself against a wall in terms of having a finance structure which allows you to borrow MORE.

Still a *terrible* idea to even suggest cross collateralising Aaron.

The best option without question would be to setup a new split SOLELY against the PPOR to release the deposit funds and then the balance of the purchase finance against the new purchase SOLELY. Any other suggestion is from poor long term thought, ignorance to the downsides or just plain laziness.

There’s still ways and means to extend your borrowing capacity as much as possible – we wrote a little bit about the APRA changes in this article a few months ago: http://www.precisionfunding.com.au/apra-the-evolving-lending-climate-for-investors-challenges-and-opportunities/

I can’t say I’ve had anyone come through that has had *zero* options available for borrowing moving forward thanks to APRA, it’s just required more finesse. For those who have substantial equity and limited income/zero borrowing capacity, commercial lending options are making it possible to continue investing:

http://www.precisionfunding.com.au/lease-doc-commercial-or-how-i-learned-to-love-lease-doc-to-continue-investing/