Is it possible for you to not use the LOC for personal expenses – possibly use the rental income to live on while borrowing to pay the interest?

Also if the house isn't available fo rent yet then you may find the costs associated with getting it ready are not deductible. Speak to a tax advisor about putting it on the rental market first and see if this changes things.

You should read the residental tenancy act in the state the property is in firstly.

A mortgage wll take priority. Other debts won't generally, but if someone else has an equityable interest in the property and this interest is notified by caveat then they would likely have priority over your interest – which is just as a purchaser.

So the person who lodged the caveat could get a judment and then an order to sell the property and this may override your interest even if you had echanged contracts.

Just make sure you have the deposit low and have it in a trust account and don't release it to the vendor in any circumstances – check with you vic solicitor as there is something in the conveyancing or real property act down there about the release of deposits. I cannot remember the details now.

You would also need a special condition that if it doesn't settle by a certain date then you get to rescind the contract and your deposit back.

Also get cpies of the caveats to see what they are. If they are all valid and relate to monies owed etc then at the end of hte day teh vendor may be bankrupted.

Daniel

ATO doesn't need jurisdiction to consider you have a main residence overseas. The Tax act says:

s118-145(4) ITAA 1997
"If you make the choice, you cannot treat any other * dwelling as your main residence while you apply this section…"

http://www.austlii.edu.au/au/legis/cth/consol_act/itaa1997240/s118.145.html

I had never considered it before, but having a main residence overseas would probably be counted and this could mean the house in Australia may not qualify for the exemption.

Rob would know better than me though.

You should seek legal advice before hand.

If you are prepared to wait and have your deposit tied up it may be worth it as most would be scared off and you may get it cheaply. But it could be more trouble than it is worth.

What state is it in?

You should seek tax advise as there are complex rules regarding continuing to claim deductions for a failed business.

ps. Did you use the same entity for the business as the investment? very dangerous.

Any deposit or proceeds etc will be held in a trust account – either a solicitors or real estate agents. There are stringent rules regarding trust monies. So it would be very unlikely that a solicitor would take the money – but it does happen sometimes. All solicitors carry insurance, so if you do suffer a loss you can make a claim against the solicitor and/insurnace.

You should be able to do most things via post such as signing documents etc. Or, you could appoint the solicitor or someone else as you attorney to sign documents on your behalf – probably not necessary.

I have bought and sold many properties interstate without ever meeting anyone – never seen the agent, solcitor, buyer or even the property. Your situation would be similar, just a bit longer in distance.

Most major banks will go up to 70% LVR for SMSFs. Expect highish fees though.

I can't see how it would benefit you.

You could look at borrowing some equity and investing into high yielding shares. Mst be careful tho. You could then possibly capitalise the interest on the LOC for hte shares and get some good dividends.

give us some rough numbers?