Finance

[WebBoard]

From: Mike .


Deposit
From: HS
Date: 01 Feb 2001
Time: 22:12:33

Hi, Can anyone clarify the answer to this question for me? If a principal residence is worth approx $250K, I believe that the banks will allow 80% equity to be accessed ie $200K.

Therefore, acording to Peter Spanns theory, can I use this equity for deposits for 3-4 IP's?

Or Can I only purchase 1 IP?

Cheers - HS

 

[WebBoard]

Aben

Reply: 1
From: Mike .


Re: Deposit
From: Aben
Date: 02 Feb 2001
Time: 02:19:44

Hiya HS,

So you have 200k to invest? You certainly can buy into 3-4 IP's with that money. It is your choice. May be worth looking at 5% deposits though, as that COULD make it more like 8-9 IP's! If you were to use the 200k on 1 IP only, it probably wouldn't be neg. geared...... so you'd be paying tax....and you would already be paying lots of tax from your *BUlgInG!!* Peter Spann influenced, knock-out share portfolio!)

Best of luck HS

PS, Don't let Mr Spann see you write about what the banks will "allow" you! Fire up HS and tell them!!!!!!!!!

 

[WebBoard]

HS

Reply: 1.1
From: Mike .


Re: Deposit
From: HS
Date: 02 Feb 2001
Time: 21:09:08

Thanks Aben, Would a Line Of Credit be the best way to access the equity and lay down the initial 5% deposits?

Although 8-9 IP's sound good, however I guess you may have to service the loans if they are cashflow negative?

Cheers HS

 

[WebBoard]

Kevin F

Reply: 1.1.1
From: Mike .


Re: Deposit
From: Kevin F
Date: 02 Feb 2001
Time: 12:14:02

You can use the equity to buy any number of IPs and it doesn't have to be used all at once. We have just bought 2 IPs using the equity in our home. The only criteria I've found the banks to use is an 80% LVR for all properties.

Kevin

 

[WebBoard]

Aben

Reply: 1.1.1.1
From: Mike .


Re: Deposit
From: Aben
Date: 03 Feb 2001
Time: 01:06:50

Hey Kevin,

Just recently had first round talks with ANZ about 5% deposits on investment loans and all seems well so far. They will even refinance my other properties over and change to 5% also(currently 10% with other lender). Anyway, still preliminary talks but I will let forum know if things go OK. I may pay for the 5% privilage with ULTRA conservative valuations on change over??? I think that, the lowest deposit possible means more IP's quicker, and a better cash on cash return on each property. Imagine no deposit loans, one's portfolio would be going off like..... a frog on an element!? Am I missing something??? Any thoughts?

Aben