It was in 2012, not 2013

Several of the forum's brokers have commented so far… why not get in touch with one of them and talk specifics. 

Sorry Prime… Aussie laws are different to UK laws.

Just to be clear… you can have some properties inside super and some outside, all at the same time.  Similarly, nothing wrong with having some non-property investments both inside and outside super, at the same time.  Your SMSF could have some property and also some other investments if you want.

Ask lots of a opinions from lots of people.  Pick and chose the ideas you like, and remember just because a particularly strategy worked for one person, doesn't mean it is appropriate to you who might have a different life circumstance or strategy.

Great post Shahin !

I wasn't talking about a line of credit, I was talking about an equity release loan.  I believe line of credit has a higher interest rate.

It does not cost you to get a mortgage broker on board, they are paid by the bank, not by the client.  In this regard, why not get in touch with an awesome broker and talk specifics?  Jamie and Shahin have already responded in this thread, why not give one of them a buzz and start nutting things out?

I've been waiting for Richard's Melbourne visit for over a year now hahaha.  I'll flip you for it JT.  Heads Richard is required to visit Melbourne, or Tails Sydney….

Your PPOR has a bank value of $825k and it has only $550k of debt.

You could get a new bank to pay out the existing loan on your PPOR and start a brand new loan.

The end result would be that you'd end up with cold hard cash sitting in an equity account and you could withdraw it and

use it to purchase an investment property you see.

I figure it would look like this:

Bank valuation = $825k

Portion of the property value that they would want to leave  in place as an imaginary deposit = 20% = 0.2 * 825k = $165k.  With 20% of the place "paid off" if anything went wrong they wouldn't likely lose too much if they had to liquidate your asset (eg if you defaulted on your mortgage).

$825k-$165k = $660k

From this $660k they would spend $550k paying out the old bank loan

The remaining $110k (ie $660k – $550k) would be dumped into an equity release account (essentially an offset account against a mortgage that hasn't yet been drawn upon) and you could simply write a cheque from that

account to pay for a deposit and stamp duty on a subsequent IP.  You would pay no interest until you actually withdrew

the money, and then you would be able to claim the interest as a tax deduction since you would be using the money for

the purposes of acquiring an investment asset. 

Make sense?  So you've kind of fashioned $110k out of thin air.

If the brokers on here can explain it better or see any issues with my explanation or calcs, I have no beef with them improving on my spiel or correcting anything.

I'm intrigued… what's this mysterious other paperwork you're referring to Paul?

Personally I would not buy into an area solely on the hope and prayer that a particular event occurs (such as a new rail line being built that is not yet budgeted for by the government).  I am comfortable buying in based on what the town already has going for it, and the stuff that is likely to come to town (such as a new freeway, or a new train line) is icing on the cake.