Cashflow is good and it helps you to borrow more and buy more properties, but the purpose of investing is to get rich, not to get as many properties as possible. Making $40 pw in net cashflow per property will not make you rich, but if you are able to buy high growth property you should be able to make more than $40pw.

I too would be very wary of Firstmac – what are the exit fees on their loans like, they were pretty huge last time i looked.

Stampcam

I am not sure where you asked that question, but I believe the stamp duty exemption isn't available if you have already purcashed a property – but this is something you should ask your lawyer or the OSR.

Here are some points to consider

Banks don't usually have a problem of revaluing a property after purchase as long as you can justify why it has increased in value – eg done a renovation. But the mortgage insurers may have problems – so you need to keep the LVR to less than 80%.

The bank's usually assign the valuation to a valuer – they don't do them themselves, some are more conversvative than others. Different banks use different valuation firms, so you would get some variation between them all.

If you have just purchased a property and get a revalue soon after, the valuation is likely to come in at or near what you paid for it. This is the true market value = what someone on the open market is willing to pay. If you have done work on the property since then, it may be more likely to get a higher figure.

Forming multiple trusts or companies will not help serviceability unless there are different people involved as personal guarantees will be required by trustees, directors etc. All existing loans and guaranteed loans will need to be taken into account.

Serviceability is not unlimited as banks assume you have living expenses (approx $16,000 pa) and they often only take a percentage of the rental income (eg 80%) and a percentage of your wage. Most also assess you at a higher rate and some assess you as a PI loan even if you are getting an IO loan. But, the more rent the further you will go. Different banks also have different ways of calculating serviceability so shopping around will help. Some banks take interest deductibility into account and depreciation which may make them good for investors.

If you can buy cashflow postive in an appreciating market you will go a long way.

I would start by making sure your loan in IO on a good rate with all of your savings going into a 100% offset account.
Constructing will take a fair bit of resources, so may be a bit difficult at this stage as you may not have enough equity. If you can convert to dual occ, then you should get a lot more rent and that may add value too.

If the value of the existing property has gone up, together with your savings, then you may be able to buy the next one and then repeat the process.

85% LVR low docs where very rare back then (extinct now i think) and the rate was very low compared to another high LVR loans. So to console yourself think of the interest savings you received since then.

I would get IO for all loans.

– IO lowers repayments, enabling you to afford more,
– helps when you hit cashflow problems
– allows you to pay PI instead and then to revert to IO if you hit problems
– keeps your tax deductions high while you can focus on reducing non-deductible debt.

Yes, its rough!