Thanks for the comments guys.  Really touched how helpful people are here, and the effort you put in even when there is seemingly little return for all the time it must take you.
Duckster, I'll sit down and re-read your information when the (6!!!!!) kids are in bed tonight and I can think straight.  Our income is even lower than the examples you used – I work part-time for $26,00, and my husband is a Uni student on no income!  How the figures kept working out for us to borrow I'll never really understand – our PPOR is paid off, so equity wasn't a problem, and we had 2 positively geared properties, and whenever we presented a deal to the bank that was returning around 6%  (7 times in a row!) the figures seemed to work for them.  I don't even know what our LVR is (although on the last house we'd well and truly run out of serviceability and had to add some to the buying and reno costs.)
Scott, we've tried to crunch the numbers to see if anything is worth selling yet, but given that we borrowed 110% on them all exccept the last one, and for 2 borrowed extra to renovate, I'm pretty sure CG wouldn't be enough yet to even pay off the loans.  When we had the renos re-valued by the bank, they only came back at what we'd spent on them.  Maybe that's different to what we'd actually get if we sold, though.
At the moment, we're torn between trying to sell a few so as not to have to sell when interest rates are higher, and there are less buyers, or waiting to see if things really do get dire for us.  There's always the chance we will be able to hang on for a while and it would be kinda painful to miss out on a boom by a year or so (if indeed there is one coming.)  It's hard because it all depends on the employment situation of my husband after Uni, which at the moment is a big unknown.
Anyway, thanks for the chance to have a bit of a 'chat,' and thanks again for the kind replies. 

Thanks for the reply.  Maybe the company idea is something we can talk about when we have our taxes done at the end of September.  We're trying to figure out now whether carrying the losses forward might be beneficial despite the loss, but we need a crystal ball – no idea how much we'll be making in the future, and the losses will probably be large enough each year that extra will probably be wasted anyway.  Thanks again for your ideas.

Thanks 4 your comments and fast replies.  $260,00 was the valuation.  Can't go elsewhere because loans all tied up in knots and cross callatorised (I know, I know…..)  and we need to settle on the 3rd of September.  Hope to untangle our loans  if/when we get more equity, but until then it seems like the only way to be able to get finance.  Have thought about trying another bank, but the Comm Ban provides 'relationship managers,' – ours has been brilliant, giving us pre-approval within minutes, doing the figures and being creative, letting us have his mobile to contact out of hours (which we're careful not to abuse.)  It's been the most amazing help and has allowed us to move really fast on undervalued properties and buy 7 in the last 11months.  Going unconditional has been instrumental in getting us across the line when 2 or 3 parties have been competing for the same property, and without our 'relationship manager' (hate the title, but love the service,) we wouldn't have been able to get answers anywhere near as fast.  Does anybody know if other banks offer a similar service?
Re: the valuation – we've decided not to panic until we hear what the property we're buying has been valued at.  Maybe (pipe dream???) the fact that we bought it cheaply and have started to renovate will push it up the 20% we need.

Hi again crj,
do you know Hill Street at all?  We'll have to buy sight unseen, so I'd be taking the agent's word it is in a 'good' part of town.
Cheers,
Sheree