Subject to servicing still…

The bank can come after all your assets. But unmortgaged assets will take longer to take, I mean property not mortgaged to that bank relating to the loan in question.

But the real advantage is if you are in trouble you could sell one property and keep the other and use the cash released to get you out of trouble.

If you had 2 crossed properties you could sell one but only with the bank's permission as they would need to release the mortgage on the remaining property. To do this they would need a new valuation, perhpas new financials too and they may even require the money released from the sale come back into the loan of the remaining property. This could leave you up shit creek. Imagine if one property had dropped in value….

Many reasons why you shouldn’t cross collateralise. Similar to why you should not allow the bank to put your gonads in a vice.

Just do a google for "veda credit report free" and please report back.

Yes, def IO.

I would try not to use the offset money if you can, try to borrow the lot and then move your cash with you to the second property's offset account to offset the interest while you are living there. Set up a LOC on the first one if you have the equity. And use this as deposit on the second avoiding cross colalteralising the two.

You need to see a lawyer to set up the structure for asset protection and a tax advisor for the tax side.
1. Using a trust can be a good idea. Factor in non offsetting of losses against personal income and land tax – 1.6% every year in NSW. How you structure the trust is very important for borrowing, asset protection and tax. Who plays which roles is important. Succession on death or incapacity is very important. Same with the company trustee (never have individual unless only buying shares).

Using a bucket company is good. But what happens to the money in that company? If it is paid out as a dividend then people on the top tax bracket will end up paying more tax. If it is left in the company can it be lent back to the trust? Need to consider Div 7a need loan agreements in place and charging of interest – will Div 7a even apply?

2. don’t use money in an offset account. You will be wasting tax deductions.
How will you get the money from you to the trust – gift, or loan? What would be the terms of the loan, how is this documented etc are all important.

3. Don’t buy inferior regional property with no capital gain prospects.

Hi Derek, thanks for the mention. I am a lawyer, tax advisor, finance broker and qualified fin planner (but not practicing yet). Also interpreter in Japanese – but a bit rusty now. Given up pole dancing as I am too heavy now.

I can advise on all aspects of setting up structures and asset protection. But not taking new clients for another month while I set up my new law firm, FinLaw…

Very hard to get a loan increase to 95%

The superfund can get the usual tax breaks. Any loss can be used to reduce hte tax paid by the fund, albeit just 15%. This could mean you fund may not have to pay income tax which can assist in stretching things further.

Once you have found a property and paid the 20% deposit the thing should almost fund itself. You can then use the offset account to accumulate more funds such as the compulsory 9% SG put in by your employer. This will save even more interest and allow you to build up a deposit for the next one quicker.

Or you could get one property and then invest in shares with 100% franked dividends. This would be very tax effective if the fund had $0 taxable income as the franking credits would mean the fund would get a lot of tax back.

The risk is two fold

1. Council could order it to be removed

2.  It could be unsafe – injury potential