Dead man walking or masterstroke?

Jules,
The concept is a sound one and some of the responses raise good points.
To build a portfolio quickly with what you have said, you need to use as little of your own money as possible and borrow more for each property. LMI is just a cost of doing this. Based on your combined incomes, it should be possible to purchase 2 IP's if not more if you are smart about properties purchased.

You are presuming that the H&L will come up to $350k, an assumption that doesn't always work out.  Depending on stamp duty in your state (or not) it will add to the funds you need to pay to settle. There are not that many developers that I know of who leave that much on the table.

However, working on your assumptions and costs, as long as you can show servicing (pick your first lender carefully) than you could revalue to 90% after completion and pull our $350k * 90% = $315k, less LMI of say $7k = $308k, less the initial loan of $224k, you will have access to $84k. As an investor wanting to build a multiple property portfolio, you set up a LOC for this $84k and use it to fund the next IP.

You use $60k again and borrow 85% to 90% from another lender to settle the second IP. The choice of the second IP is critical as well, making sure you can show servicing for the new loan. Lenders use different criteria, different assessment rates, different living expenses allowances, different treatment of existing loans, different rental income assessments, some allow 100%, others 80% and others 75%.

You plan your third IP purchase before you obtain finance for the first IP and determine what the characteristics of each IP needs to be so you can borrow for the third IP.

As Linar said, it is harder to continually obtain finance so you need to think the three steps ahead, down to property type, price, deposit required, which lender to use in what order. Most mortgage brokers do not know how to do this or even know they need to. Find an experienced MB who is a multiple owner themselves and know how to do this for you. Unless you know what you want, I would not use a bank directly. You run the risk of them doing credit checks and that can come back and bite you in the backside big time down the track.

As to ownership and structure, on the basis that asset protection is not critical, marginal income tax rates are one aspect to consider, time in the workforce and future plans is another. I have a client, both on good incomes but were planning a family in 5 years and one will be staying home, the choice was to purchase a lower priced IP with a higher rent yield in the name of the person to stay home. The IP was negatively geared now but likely to be neutral if not positive in 5 years, so greater longer term  benefit in one name rather than the other. The second IP was purchased in other partners name with lower rent yield but greater capital growth potential and higher value.
Another client, three IP's were purchased in one name due to high MTR before the 4th was purchased in spouse name. The first three IP's were new or near new to obtain better depreciation benefits yet still yield reasonable rental income in capital growth areas. The 4th IP was targeted towards more neutrally geared perhaps without the higher capital growth potential.

Property investing has become more scientific than previously where the ability to borrow and refinance was ridiculously easy and people just went for capital growth. Now it is about maintaining the ability to borrow for the next IP and the one after that.
Good luck
Greg