Hi J

Welcome aboard.

In answer to your questions.

1. You have $150k of "actual" equity. However, the bank won't let you access all of that. They will let you either access up to 80% of the properties value ($55k) or possibly up to 90% ($102k) depending on the lender.

2. No. You don't have as much "useable" equity than you thought. Taking the example above, if the lender allows you to go up to 90% of your properties value ($102k) then you would use these funds to cover the deposit/purchase costs on your next PPOR and then you would borrow the rest. Let's say $34k (which is 5% of $680k) gets swallowed up in purchase costs such as stamp duty, legal fees, etc – this will leave you with about $68k to use as a deposit which is 10% of the purchase price.

3. You would have three loans set up:

     Current PPOR

     Loan 1: Current PPOR loan of $325k

     Loan 2: Equity release of $102k

     New PPOR

     Loan 3: IP loan of $612k

I haven't run an assessment on your servicing – but this is how the structure looks.

Structure this correctly from the start. The info above is very general and there's lots to be considered here and chances are, if you deal directly with a bank or a mediocre broker, you'll end up with a mess of a structure.

Cheers

Jamie

Yep – prob have a better chance under the package.

The MISA isn't too bad. It's not quite a normal offset but it's easy enough to get around the little quirks. I used one for years without too much hassle.

Cheers

Jamie

Investors have, and will continue, to make money out of lower socio economic areas.

Some buy undervalue, some add value – and some buy in areas that are experiencing a gentrification process.

Cheers

Jamie

All of it.

Cheers

Jamie

The minimum deposit required to purchase an IP is 5%

You then need enough funds to cover purchase costs such as stamp duty and legal fees.

Unless you have enough money to purchase an IP outright (which isn't usually a great idea) then yes, you will need to take out a loan.

A decent broker/banker will be able to assess your situation and provide appropriate advice.

Cheers

Jamie

Hi there

Welcome aboard

Here's a sticky thread on recommended reading – https://www.propertyinvesting.com/forums/community/heads-up/6845

The first part is getting clued up. Continue to read/learn.

Different authors will have different strategies – there's no right or wrong, you just need to look at what works personally for you.

Cheers

Jamie

Hi Steve

Richard has provided some great advice. If you don't already have a good finance person on board, then it would be worthwhile giving him a call.

Cheers

Jamie

Hi there

Did you sign anything?

Cheers

Jamie

If you're in Syd then I'd be approaching this guy (Terry). He knows a thing or two about IPs and the law.

Cheers

Jamie

Like Derek said – a 20% deposit isn't always necessary to get the deal done. Generally speaking, the minimum required is a 5% deposit and funds to cover purchase costs such as stamp duty, etc.

Cheers

Jamie