Hi Richard,

Thanks for the reply. I wouldn't mind staying at home for a few more years to come and I would like to purchase a unit somewhere in Sydney between $400-500,000. I understand the first part in acquiring my first IP and all the deductions etc associated with it. What I am confused about is if I go to purchase a second investment property and I am already negatively geared with the first one, if I use the equity in that investment property to come up with the deposit for a second loan, that will mean I am paying interest on that equity I have drawn out of the property as well as hoping the tenants in the second property service the interests of the second loan. Is that correct?

I am thinking worse case scenario here. I dread the thought of having to top up any shortfalls in the first properties costs, pay interest on the drawn down equity and pay any shortfalls in the second loan. Does this just come down to selecting the right property? I read about people who earn less than me and they have multiple properties to their name.

I went to an Aussie mortgage broker last year and he said Commonwealth would only lend to me 90% LVR I.O but I felt he was just satisfying his own business. Surely, there isn't only one lender willing to accept my business.