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Hi Rus

Firstly welcome to the forum and I hope you enjoy your time with us.

As Terry mentioned the normal recommended way is to take out a Line of Credit or equity loan against your existing securities and use these funds to as deposit and acquisition costs for the new investment property being purchased.

After a couple of years we revalue the investment properties and looking at taking the standalone loan back up to 80% of the increased value and use the funds to pay down the LOC enabling the funds to be re-used again for further deposits.

I purchased and still own 40 properties which i acquired over a decade to 2004 before i retired for the first time. 37 of these properties are fully paid off and the balance of the loan will be gone by mid next year so it can be done as per Steve's book however the market has changed and you probably need to adopt a slightly different gearing and repayment strategy.

As a Buyers Agent with representation in Qld, NSW and VIC we get asked regularly by clients how to structure their lending to enable them to purchase multiple properties.

I say to all of them with sufficient equity / cash resources and serviceability thru rental and personal income there is no reason why you cannot purchase a serious number of properties and live off rental income for the rest of your life.

Going forward however with no guarantee off capital growth you also need to focus on rental yield.

Cheers

Yours in Finance

Hi Rus

A few things to think about are:

1. Buying entity. You could potentially buy even more properties inside a smsf

2. Proximity to retirement age, will largely dictate strategy.

3. Proximity to retirement age, how much spare time you have and whether your time is better spent generating the cash as a CPA will dictate whether you should DIY or outsource the assembly of the portfolio.

Hi Rus,

Easy – get someone on your team who has already achieved what you want to do. Richard who commented above is your man.

You could also develop the 5 properties. If you do the sums right you can end up with positive cashflow properties which would cost you less than market value and stampduty only on the original purchase of the land.

Food for though.

Oscar

Hi Guys, as first port of call I would get some valuations done to see  what the real equity position of your portfolio is in the eyes of a potential funder.  To be serious you really have to look at investments and funding that don't rely on you wage income. Low LVR commercial real estate –  but only if you have experience. 

I’d be very careful about the method of this approach. I would not have a lender value a property they already have the mortgage over. You could find yourself in a spot of bother if they decide the property is worth less than what you owe them. Wouldn’t be nice to be asked to balance things by handing over a big wad of money.