Hi Paul

Welcome aboard.

With $40k, it's not going to cover a 20% deposit and costs on a $190k purchase as you've alluded to. It would be in excess of $45k at least when you take into account stamp duty, legals, ect. 

However, that's not the end of the world because a lend higher than 80%  for an IP  in the hunter shouldn't be an issue from a location perspective. We've financed heaps of them for forum clients over the years.

You mentioned interest rates in one of your posts above. If sticking with the same lender for the IP loan, then you should be getting at least the same rate or lower. When your total borrowings go up with a lender, you can often negotiate on the rate – your banker/broker should be able to arrange this on your behalf.  

Also, think about your longer term plans and what you're aiming to get out of property investing.

If you're looking to purchase multiple properties in the near future then maybe look to hold back on spending the entire $40k on the first purchase and retain some for the next.

You may even consider accessing more equity in your PPOR – but then you need to look at how comfortable you are with risk.

There's lots to consider.

Cheers

Jamie

The 228sqm sounds like the entire block size.

We've got a 3 bedroom unit/villa that sits on a 300m2 block.

It's usually big enough for a front garden and a bit of a courtyard out the back.

Cheers

Jamie

I know CBA will look at it. But are you 100% sure that it will be considered under their DUA? I'm pretty sure they wouldn't last time I checked, but if I'm wrong then that's fantastic news for Sammy.

Either way, it won't hurt for the OPs broker to check whether CBA's Direct Underwriting Authority (DUA) covers 4 units. It's just a phone call. 

Cheers

Jamie

CBA's DUA with genworth stops at 3 dwellings. I would be reluctant to use them for this.

Cheers

Jamie

No worries.

If you suspect that you may own another PPOR in the future then I'd avoid paying down the principle on your current PPOR loan – as this debt will become deductible once it becomes an IP.

Instead, I'd set up an offset against the loan and change it to interest only – park your spare savings and extra repayments in the offset.

This article I wrote explains the concept in more details.

Cheers

Jamie

Hi Neetish

Most capital city markets have been relatively flat over the last couple of years. This could be attributed to a period of high growth post GFC that had most capital city markets experiencing double digit growth within a short period of time.

I'd look at what, if any, growth drivers there are in the area. Is there anything that suggests that unit values within the area will increase in the future? There's a good book by Margaret Lomas called 20 must ask questions that will give you an idea of the type of things to look for in an area.

If you're planning on renting it out in a few years – does this mean you'll be purchasing another PPOR? If so, you may need to look at your current loan to see if it's set-up correctly.

Cheers

Jamie

Some agents can be absolutely ruthless and will try and will try to persuade the buyer into signing the contract by any means. 

I've had a lot of agents in NSW offering clients 5 day cooling off periods recently – which is hardly enough time to get anything done. Unless it's a sub 80% lend and there's no valuation required, chances are it's going to take a bit longer to get formal finance approval. You also need to get your building/pest inspections carried out – check over the strata minutes (if applicable), go over the contract with your legal person and perform any other final DD checks.

Cheers

Jamie

You just need to look at the opportunity cost.

For this to be a worthwhile investment, it's going to need to go up in value at a rate higher than the cost of holding it. It doesn't sound like that you're overly confident that this might occur.

I'm a bit of a boring buy and hold type of guy so I generally try to avoid selling anything – but if it's a dud investment and the funds could be utlilised better, then so be it.

Cheers

Jamie

Hi Jenna

I got into property investing for the same reason as most – wanted financial freedom and the ability to retire early.

I became a bit of an IP nerd and studied up heaps! I built some good contacts and my wife and I started to build our portfolio – most properties have been purchased around our home town. We like properties that we can add value to easily with cosmetic renos.

Property investing led me to mortgage broking and establishing my own business –  now retirement is the last thing on my mind! Staying productive and busy is what I need.

Cheers

Jamie

Anthony from Australian Legal and Finance used to post here quite a bit. He hasn't been around in a while but is worth a shot – http://www.truelocal.com.au/business/australian-legal-and-finance/brooklyn-park

Cheers

Jamie