Hi Clint, I have seen Dean and Elise's systems in practice first hand for the last 3 years. Whilst I have not purchased their material, I have seen their cash flows, feasibility tests and other tools that they use to identify and analyse potential purchases. If their educational material accurately captures what they do themselves, then I can…[Read more]

Hi Keiko, It depends on whether or not you are borrowing against residential or commercial security. If you are borrowing for a residential property, then the home loan rates are the same for companies and individuals. If you are borrowing for a commercial property, then the commercial loan rates are based on a whole different set of criteria, and…[Read more]

Hi Asoka, Are you aware of the forecast for the Australian population? Last report by the ABS (I think) stated an estimate of 35 million people by the year 2050. Immigration might slow, but it won't stop.With respect to interest rates, this worries me a little, but not for another 2 years. I expect that by the end of 2011 things will have begun to…[Read more]

My tip would be to start as early as possible… and i mean EARLY. If I had my time again I would have rocked up to the bank on my 18th birthday asking for as much as I could get. As it turned out, I bought my first place at 21, and now have 3 properties, with about $600k of equity.In fairness to your theory, I do get paid more than the average 26…[Read more]

Hi Rich, Do you ever advise having a seperate line of credit to pay the interest on the investment property loans? (Rather than paying it from the offset account against the PPOR) I am in the process at the moment of trying to work out whether this would be deductible, or if the ATO would smash me under Part 4A.

GOM,Depends how quick you are in and out of the project as to whether or not the commercial rate really affects you. I have clients that do around 6-7 multi unit sites per annum. They are usually in, reno'd and out in 6 months for each project (and obviously run a few side by side). Net Profit Before Tax is anywhere from $100-$250k each time, and…[Read more]

Just show her the 40 odd properties you have in your respective trusts!Now if you were wrong about even half of those you wouldn't have even half that amount!

Hi Christian, Have you had any experience with banks in terms of pre-sales to related entities? Generally pre-sales will only be classified as such if you have 10% cash deposits and the sales are to non-related parties. Now there are of course variations to this, but these terms will give you the least problems with your financier.

NAB was the only bank that grew its commercial loan book during 09…

GOM, FYI I can confirm Richard's comments (not that he is ever wrong). NAB will do 3 as resi (provided you are not a specific property developer/investor). Once you hit 4 it becomes commercial, however it is possible to do a block of units at 80% against the "in one line" value (just in case you were curious on LVR also).

Hi Jac, To be honest I'm a lot less worried about it than I was 18 mths ago. I think there may be a shift of funds to the big 4 banks once the guarantee is lifted so that should boost their deposits and strengthen their balance sheets. A lot of smaller players attracted funds when the guarantee was introduced, but some of these are seen as risky…[Read more]

7 Steps to Wealth by John Fitzgerald… purely for motivational purposes. Even thought I didn't learn much from the book, it got my off my a$$ for my first property purchase which got me out of the "analysis paralysis" phase.

I agree with Terry. If I were you I would not unlock the equity until just before settlement of the new property (or at least when the deposit is due). If you place it into an offset account and then do not buy the investment for say 6 months, there may be some uncertainty as to the use of the borrowed funds.

I agree with Richard's comments Ash – This will give you maximum flexibility for whatever plans you cme up with next.

Hi Shangrila, Speak to your banker or mortgage broker about interest capitalisation. In terms of development/construction finance, this is a way to delay payments until the end of the loan.

Hi guys, Unfortunately not. The tax deductibility of a loan depends on what the funds are used for. In your example, the funds are being re-drawn to purchase your own home, and the loan for your own home is not tax deductible. If you take out a new loan against the investment property to purchase shares or another investment property (ie: a…[Read more]

I can only think of two: 1. If you are not a disciplined person, then you may be tempted to spend the money in the offset. If you get a P&I loan with no re-draw then this problem is eliminated. 2. A lender that will not let you borrow more than a certain limit of facilities – This can be solved by finding a lender/bank manager that understands…[Read more]

In short…yes!If you pay money into your home loan (for a PPOR), and then try to re-draw later, the re-drawn funds are NOT tax-deductible unless you use them for an investment purpose.So if you decide to rent out the current PPOR and move to a new PPOR, you will have a higher debt on the NON-deductible loan, and a lower debt on the deductible…[Read more]

Hi mason. I think the biggest limitation you will have will be being able to borrow the amount you require based on your total income. Even if we assume that your mum will pay you $400 per week, this extr $20k on top of your existing $50k (all pre-tax of course), may not be sufficient for total loans of say $700k. If you use the current…[Read more]

Sure Sasha. For the purposes of this post, I will assume that you are living in the house as your principal residence. The benefit of a 100% offset account is that any money you place into the account (which is seperate to your home loan account) offsets the interest that you pay on the loan. For example, if you have a $100,000 loan, you will pay…[Read more]