Brilliant.  Brilliant!

Excellent!  Remember to check back in periodically and let everyone know how your story panned out    In a few years your story will be able to act as a guide for others that are just starting out as you are today.

Everyone will of course have their opinions.  As for me, I wouldn't bother for the following reasons:

1. Your current property is a proven performer, and is already cashflow positive.  You can hang onto it and use its income and/or its equity to leverage into additional properties if you wish.  Richard Taylor (userid Qlds007) or Jamie M on these forums are great mortgage brokers that can assist you to make this happen in the correct manner.

2. If someone was trying to talk me into selling proven property, to sink it into a property that is going to apparently get me $6k under market value, I would be trying not to laugh.  When you sell your current property, there will be selling costs (you must pay your solicitor and you must pay the selling agent).  When you buy into additional property you must pay costs (stamp duty, bank mortgage fees, solicitor).  So why would you sell for such a tiny undercut on the market value.  Depending on the pricebracket of the property, people under and over pay by $10k all the time.  This is because the price of a property is dictated by what people are prepared to pay for it.  Not by an itemized bill of every brick, doorhandle and lightfitting in the place. 

I have no doubt your friend can assist you to buy 1mill worth of property, but unlikely he can assist you to buy 1mill worth of property for $800k, and without you incurring substantial costs jumping out of your current property and into those he'll acquire for you.  I have a sneaking suspicion you have reservations yourself which is why you're looking for others to confirm your thoughts. 

Why not hang on to the property you have and use it as leverage.  Do your own homework on what suburbs and property types you know will do well and are in demand, and if it so happens your friend can get them for you cheaper than you can get them by yourself, then great…

Hi Leon

If you buy well (ie negotiate a great discount) and then make some improvements to the property (ideally with borrowed money) you can increase the rent.  The end result is a higher rental yield than you would have gotten if you just rented out as is (presuming you've played your cards correctly).  So at this point you get the bank to revalue the property and surprise surprise, it is worth more than it was when you started.  So in a nutshell, you've manufactured capital growth.  Fashioned money out of thin air.  So you can refinance… pulling out the equity to use as a deposit on the next place.  Rinse and repeat.

Nice one, thanks for sharing!

Get in touch with Jamie who has already responded to your question.  He's a very knowledgeable broker held in high regard on these forums.  Ditch the Mortgage Choice person and bring Jamie on board.

By the way, if you are particular interested in keeping track of a thread, you go to the first post of the thread and you click on "You are not watching this post, click to start watching" and you will get emails each time there is an update.  It also gets saved into your Watched Posts.  Go into your profile to see it.

Right click on link, select Open in New Tab (or Open in New Window)

ps Perhaps don't put expensive curtains into a rental again.  Cheap and tidy so it is not a catastrophe if you have to replace them. 

Also any profits you make get taxed differently if you are not living in Australia.