Loan structure

Dear SS experts,
I started property investment mid Last year. I had fair bit of equity in my PPOR, purchased my 1st IP, cross Coll with my PROP.

Now I am buying my second Investment property, and I wanted to have the correct loan structure this time, as my 1st IP built a little bit of equity (10K's), so my broker did this structure.

New 3 loans
- 1 for IP1 with 90% + LMI
- 1 for IP2 with 90% + LMI
- 2nd loan against my PPOR , 10% for both loans + stamp duty + Solicitor for the IP2.


My questions:
- Should I have 2 loans against my house to make it easier for the accountant (One for each IP)

- For IP2 I have some renovations to do, around 10 K?s, If I need additional 10K?s to do this , what should I do. Isn?t it better to pay it from the loan as this is cost of investment?.

Please let me know your thoughts.

Thanks
Ram
 
Dear SS experts,
I started property investment mid Last year. I had fair bit of equity in my PPOR, purchased my 1st IP, cross Coll with my PROP.

Now I am buying my second Investment property, and I wanted to have the correct loan structure this time, as my 1st IP built a little bit of equity (10K's), so my broker did this structure.

New 3 loans
- 1 for IP1 with 90% + LMI
- 1 for IP2 with 90% + LMI
- 2nd loan against my PPOR , 10% for both loans + stamp duty + Solicitor for the IP2.


My questions:
- Should I have 2 loans against my house to make it easier for the accountant (One for each IP)

- For IP2 I have some renovations to do, around 10 K?s, If I need additional 10K?s to do this , what should I do. Isn?t it better to pay it from the loan as this is cost of investment?.

Please let me know your thoughts.

Thanks
Ram

Yep, looks like your brokers cleaning up the x-coll.

1. Up to you, no real difference from a tax perspective. If its free to do the loan split, no harm in doing so.
2. Yes, borrow it, deductible expense.

Cheers,
Redom
 
Hi Ram

1. No - not really. Deductibility is determined by purpose. If the one equity release loan is covering multiple investment property deposits than all good.

2. Makes sense to borrow it. Consult with your accountant though.

On another note - were you hit up for LMI again when uncrossing? I'm an advocate for uncrossing messy loans - but not usually when there's LMI involved. Can become tricky....and potentially expensive.

Cheers

Jamie
 
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