Suzie

$10,000 is almost 10% deposit. Could you come up with some more money from a credit card? Even at 17% interest rate, the figures may still work if the rent is that high.

Your broker might be trying to get some more commission by trying to get you to refiance everything too.

Terryw
Discover Home Loans
North Sydney
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Have a look at TR 2002/18, Income tax: home loan unit trust arrangement.
http://law.ato.gov.au/atolaw/view.htm?locid='TXR/TR200218/NAT/ATO

(This is a Tax Ruling on renting you home from your Unit trust)

Terryw
Discover Home Loans
North Sydney
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What you really want is the full licence. Then you can open your own agency. To get this you must do the full course which is 4 years with TAFE (part time) or 7-12 weeks with a private fee paying institute (cost about $4000 to $5000). I think you also need 2 years experience working in the industry too (NSW the rules changed recetnly).

Terryw
Discover Home Loans
North Sydney
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Brett

Good idea, but not all banks will allow this.

Terryw
Discover Home Loans
North Sydney
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Most people would have done it the other way around. Your most valuable asset is securing your investment property. But it should be pretty safe!

Yes you could restructure and get a loan secured against your investment property and access that equity for deposits for investment properties. You should be able to buy a fair few with that sort of equity.

Terryw
Discover Home Loans
North Sydney
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Michael

If you were going for a low doc loan, htey would not know wheter you are trading or not! No proof is needed.

Terryw
Discover Home Loans
North Sydney
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Remy

You can still pay off your mortgage and invest at the same time. Imagine if you got into a few positive cashflow properties, you could get a LOC secured on your house, so you ‘home loan’ would remain the same level, then buy cashflow property using IO loans, and pour the excess funds into your home loan-paying it off in now time.

Taking things to the extreme, you have a $700,00 property, 80% of this is $560,000, minus $30,000 home loan would leave you with $530,000. This money cold then be used as deposits on wraps. Taking an $80,000 property for examaple, you would need $20,000 for deposits and costs (taken from the LOC). $520,000 divided by $20,000 = 27. So you could theoretically purchase 27 of these properties. The cashflow on one of these would be about $3000 per year, so that would give you a yearly income of $81,000. Plus when each property wrapee cashed you out (about every 1 to 3 years) you would make another $15,000 capital gain as well.

The above all depends on your incomes and serviceability etc.

(If you think you can’t wrap, there are people/companies that will do it all for you for a fee-some are on this forum.)

So you could probably retire within months if you really wanted to.

Terryw
Discover Home Loans
North Sydney
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Of course. You would have to pay tax on your profits (income minus expenses), this would be added on top of your other income. If this figure is negative it reduces the amount of tax you pay, but if positive, then you will pay more tax.

Terryw
Discover Home Loans
North Sydney
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Good post Rod.

Just a few more points. The family law court has wide reaching powers and is able to reach assets held within a trust and split them accordingly in some circumstances (so watch out!).

Centrelink also has recently become aware of people using trusts to lower their income and so if they deem you to control hte trust, they will attribute all or part of teh trust income to you automatically no matter how it is distributed.

for more info, there are some interesting articles on the following sites:
http://www.taxlawyers.com.au/
http://www.taxlegal.com.au/
http://www.chrisbatten.com.au

Terryw
Discover Home Loans
North Sydney
[email protected]

Felicity

2 good low docs without LMi include Adelaide Bank and ING bank, both up to 76% without LMI.

Others include ANZ and St george at 65% LVR.

I think it is agood strategy to get as much money as you can early on when it is easy, ie 95% if possible. Keep you cash for future properties. Then reduce you LVR as you go forward. changing to 80%, then 80% low docs without LMI etc.

Terryw
Discover Home Loans
North Sydney
[email protected]