Hi AO,
Borrowing is only one side of the coin. Should your friend even consider buying if there is a high risk of property value falling in the next 2-3 years? I suggest your friend gets another independent valuation (and this time for market value rather than for lending because the valuation for lending is usually more conservative). I know this will cost bit more but its better to do your homework before buying. This may save your friend from buying a potential lemon. Also, as suggested by Marc, your friend should do more research on the local areas – maybe buy sales reports, etc.
Hope this helps.

Hi tuggerwaugh,
Other than the comments already mentioned above, I suggest you should consider changing your loan to Interest Only. It does not stop you from making excess repayments but not force you to pay principal.

Try Nancy Keep from Nancy Keep & Associates
http://www.nancykeep.com.au
03 9544 9577
I have used her for more than 6 years and she is excellent with properties. She is a property investor herself.

Hi kokjhoonwong ,
Instead of cross collateralising, why don't you take a line fo credit on your existing properties and use that equity for cash  purchase of the new property at the caravan park?

Hi Redhat,
You can call up a few local agents and get a feel of vacancy rates in the area.

Hi wealth4life.com
I have looked at some of his reports and they seem to make sense.
However, it would be interesting to see if anyone has analysed his old reports (say 3-5 years back) and compared the predictions then with actual results.

Hi swifteagle,
You can avoid cross-collateralising by using the equity in one house as a cash deposit for buying the second house. For example, you have a PPoR valued at $500k with $250 owing. This means you have $250k equity in your PPoR. When you want to buy an IP, you can draw the equity in your PPoR (say $100k) and use that for 10% deposit and closing expenses for your new property. This would increase the owing on your PPoR to $350k but there is no cross-collateralising.

Hope this helps.

There are few things you should consider:
* Firstly, renting is the cheapest accommodation. Consider renting for living and use this property as an investment immediately.
* What is the profile of tenants in that area? Are they individuals, couples or young families. That will probably give you an indication of whether 1 BR or 2 BR will be in higher demaind.
* What is the size of the 1 BR unit. If its too small (I think <50 sqm), the lenders may only lend 65-70%.

Personally, I would go for a 2 BR unit as they have higher demand. If there is a renovation opportunity thats even better. Opportunity for capital gain quicker.
Hope this helps.

You can try drakehomes.com.au for removal homes, or
halleyhomes.com.au for kit homes