I think you will have a hard time finding a business type loan. You can get a investment loan based on the security (rather than the buisness idea), but you will need to prove serviceability – which will be hard if not working.

Probably you will have to settle on some sort of No Doc loan, with a deposit of 20-30% needed.

Get an ABN now if you do not already have one.

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None will lend 100%. One or two lend up to 95%, but the rates are high, around 9%+.

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LOCs generally have higher interest rates. Costs are also generally a bit higher, or same as normal loans.

If you have lousy cshflow, then maybe a No Doc loan is for you. It is possible to get a LOC with a No Doc or a standard loan – sometimes these canbe used like LOCs if they have free unlimited redraw (eg. Macquarie Mortgages)

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Hi Carl

I am not an accountant, but have approached various acountants about similar questions over the years. Some say you can capitalise interest and claim this – this is standard practice in many businesses. However thers say it cannot be done.

One idea is to get a Investment Property IO loan with bank A. You own home loan is with Bank B, and you have a LOC on this property separate to your existing loan. You then pay the interest for your IP loan from the LOC (ie you borrow money to pay interest), you then pay the monthly interest bill on the LOC. At the same time you put all spare money including rent from the IP into the offset account against your home loan – only paying the minimum amount of interest on your LOC.

This is not similar to the Hart’s case as there are 2 different banks involved, and you are not strictly capitalising the interest on one loan.

I haven’t tried it, and don’t know it if works, but it sounds good.

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Yes, you are heading in the right direction. Possibly start off with a trust, and as you progress you can add more layers.

Just read everything you can get your hands on concerning this topic.

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RAMS will do up to 80% on No Docs, and Maquarie up to 70%. Macquarie have reduced their rates as well for loans over $200K – now 6.98% with No LMI payable.

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Keeping all properties may limit how far you can go because of servicing problems. So you may have to sell a few, eg. do 4 keep 3 and sell 1, using the profit of this one to go further.

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Hi Carpe_Diem

Derek had a few good ideas. I love the living on equity concept as you get to keep a property which you would otherwise have sold. If you keep it you get all future growth as well, which you would love if selling (plus all the costs etc).

Hopefully your properties are in high growth areas.

Just keep in mind that most No Doc lenders will only lend for investment purposes. You can borrow against your own home, but must be for further investments.

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Hi

There is usually a sunset clause in the contract. If the building is not complete by this date, either party can usually pull out without penalty. You can use it to your advantage, but so can developers – many have delayed the construction process so they could pull out of the contract and resell at higher prices.

As for deposits, you can try and do some negotiating to get this down.

Also be careful, now may not be the ideal time for buying off hte plan if the market stays flat.

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ANZ may consider it residential.

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