bambam

I wont comment on whether i believe you can sell the property now as i assume you have spoken to the OSR.
As far as i am concerned it is 6 months in the first 12 months.

Now how you on sell the property (assuming you dont wish to sell it in the open market) doing it by some form of rent / buy, instalment contract, License to occupy will vary.

Initially all you would so is decide on a end price you want for the property and an interest rate you wish to charge and then decide which method you want to offer potential buys.

Each has its advantages and disadvantages depending on what your long term goal for the property is.

Do you want immediate income, good long term income, a quick capital gain ?

Once you figure this out you will be able to move forward.

Just remember as from July 1 you will need to be licensed under the new National Credit Act 

Yes there are.

Yes depends on the level of bad credit you are referring to.

Terry is right if you think you are ill disclined then pay off the loan and the positive cash flow will serve you when circumstances change.

If you are good at budgeting then interest only will serve you well in the long run.

Depends if he has an allocated number of searches he can do each month before he reaches his maximim allowance and has to pay extra for them.

If not why not come clean and ask him.

Hi Grug

Love the avatar by the way.

To be honest personally i would still look to use as 100% offset account on an interest only basis at least for one of the properties even if you place 20% deposit down on the first purchase and keep the rest up your sleeve for future deposits.

The funds in the offset account will still make the properties positively geared as you will only be paying interest on the net balance yet preserves the deductability of the interest and the flexibility of the account balance in case you need to access for non deductible purposes in the future.

Remember this could include a deposit for a PPOR.

Be happy to assist you if you want to drop me a line and we can run through some ideas.
Have 101 forum clients scattered all over the Country and with email and electronic loan lodgement these days distance has never caused a problem.

Andrew

Rather than using a personal loan you could fund the deal from a investment line of credit or even capitalise the interest.

This is a structure we establish for many client undertaking small developments. 

Hi Zan

To safe guard the deal why not take out the LOC secured against your PPOR with the Commonwealth for 20% of the investment property purchase and acqusition costs and then look to take out the investment with an alternative lender.

When the property value on the IP increases increase the loan and payout the LOC with the CBA.

This way your IP lender will have no interest in your PPOR.

Assuming they are no common walls and serviceability is sufficient to cover all 7 properties.

Must admit in 15 years of doing developments i cant say i have ever seen a DA approval on a community or strata title block that has ever allowed separate titles from day 1 without the need to have them complete.

Because the ATO use the "purpose test" for the funds to decide whether the interest is deductible.

You could secure an investment loan on a herd of cows and the interest would be deductible but purchase a overseas holiday and offer your investment property as security and the interest certainly isnt claimable.

This is why you need to be vary careful and a specialised mortgage broker should be able to structure the deal for you to maximise your deductions and minimise your interest payable.