Are you willing to go into a loan with someone you don't know? What if they stop paying the bank?

What if they were to die? Divorce? Bankrupt?

vice versa too.

Did you live there?

If you did then it could be exempt for up to 6 years. What proof do you have you lived there? What proof would the ATO have that you didn't?

Get some legal advice as you may be able to legally terminate the contract.

If you don't proceed the vendor will often just take the 10% and leave it at that. But they could also sue you for any short fall.

I can point you to a recent QLD case where a developer was awarded approx $1mil for a small unit that didn't settle – value about $600k from memory.

You could be bankrupted from this so seek legal advice asap.

You should seek some advice on the tax consequences from doing that.

Jared. from this post it sounds like you don't understand the concept.

From an income tax perspective It would be better to positively gear every time because you would be making money.. But this is only part of the story. You will not get rich from positively cashflow alone – but probably worse off in the long run.

Capital growth is what you should be focused on. This is where you will make money. Aim for high rents as well. Rent is income and you want as much of this as you can get. If you get high growth with positive income this would be even better.

Catalyst wrote:

That's why I got you to do mine Terry.

Well, I hope it won't be needed for many years. And, I wonder who you really are Catalyst????

Wonder how SMSF trustees ended up investing in these. Wonder what sort of commissions were paid to advisors.

I've seen several people set up trusts incorrectly. They thought they may save money by doing it themselves but each time it has resulted in tens of thousands of dollars in lost tax, legal advice etc to fix.

A miight be better to sell the land to his builder friend after the house has been knocked down because the value would be lower – probably wouldn't work out if you were intending to finance it etc.

I’d get some legal advice before doing this