$100,000 Cash – What do we do?

NODOC loan to 70% with no income needing to be declared.

Any good broker will have a number to select from.  All depends on your needs.

Cheers,

What do you plan to do with the $100k if you don't invest it? Stick it in a bank or ING account at 5%? By the time you pay tax on your interest and you and allow for inflation you will be going backwards. If you have any personal debts that are costing you interest (even your PPoR) this is where the money should go first as the interest on any personal debt will cost you more than any savings account interest you may get.

You need to invest it somewhere eventually; why not put part or all of the cash into the existing I.P loans and reduce the debt. This will improve your cashflow and your servicability greatly, as the properties will become closer to or maybe even pos cashflow.

Have you talked to your lender about how this may affect your situation? Are they aware of the cash you have?

Many property experts say never pay off the investment loans, but the main reason for this is so you can keep on investing not using your own money, and the loan interest tax deductions will be higher, but you still need to come up with the money to service the interest payments every month (other than the rent).

It is true that there is good debt and bad debt, but less of each is always good especially if you can create a positive passive income.

The only thing with this strategy of paying down the loans is you want to keep access to the cash in the event of an emergency, so you would need to look at having loans/loan that will allow you to do this.

It may work out that once you put the cash in the loans you will have a different financial position; one that your lender says will allow you to borrow again for more I.P's.

You can still go the Lo Doc route as the other boys have mentioned, but you will be doing it with a portfolio of pos cashflow properties to support your next purchase.

Isn't the idea to have your properties support you and pay you an income which allows you to exit the rat race?

Whilst you are thinking about your next move stick the cash in your offset account and at least get circa 7.5% tax free.

As has been mentioned a Nodoc loan is available however before you sell yoruself short you woul d have some good rent and maybe suprised about your borrowing capacity. Remember not all lenders calculate serviceability the same way some take 70% of rent others upto 100%. Some qualify at variable rate plus a interest rate margin other merely at the chargeable rate. Both of these makes a big difference to your capacity. 

Bangers68, TerryW is spot on! The debt on your PPR is not tax deductible, so you should definitely seek to get rid of that debt as quickly as possible, and then use a line of credit to access the additional equity for an investment property purchase.

Of course, if you wanted to you could probably purchase something fairly cheap, for say $180,000 to $200,000, and use your $100,000 for part of the purchase so that you're only borrowing about half the value of the investment property, and you should find that because the debt is relatively low in proportion to the property value, the rent would probably cover your loan repayment and maybe even be positive cash flow. I would recommend sorting out a deal which is effectively neautrally geared (becaue this will allow you to purchase the highest possible property value before it starts costing you money out of your own pocket) so that it doesn't cost you anything, and you are as highly leveraged as possible in the market (although thuis is a strategy based on capital growth, not necessarily cashflow). That's essentially what it's all about, if your $100,000 cash grew at 10% a year (in a term deposit for instance), you'd only make $10,000, but if you had a neautrally geared IP worth maybe $200,000 and the property market grew at 10% a year, you'd be making $20,000 a year. Simple.