My understanding of Chinas approach
Find property at say $2mil
Use LOC on PPOR for the 20% or even 30% contribution and then costs. So he will need $600k + stamps ($100k) + GST (unless going concern). You will be able to claim the GST back.
Get a loan for the balance - $1.4mil financed through seperate loan (different bank) with an offset facility
Total cost $2.1mil 100% financed with all interest deductible.
Throw the excess cash into the offset account thus preserving the cash separate from the investment.
Ends up paying interest on $1.1mil and is now effectively earning interest on his 'cash' of about 5.4% (the interest cost )
I use this method for all my spare cash and achieve maximum interest with no long term commitment as I can withdraw it at any time for new opportunities.
From your previous number you might be looking at a smaller investment but the theory is sound.
Cheers
Find property at say $2mil
Use LOC on PPOR for the 20% or even 30% contribution and then costs. So he will need $600k + stamps ($100k) + GST (unless going concern). You will be able to claim the GST back.
Get a loan for the balance - $1.4mil financed through seperate loan (different bank) with an offset facility
Total cost $2.1mil 100% financed with all interest deductible.
Throw the excess cash into the offset account thus preserving the cash separate from the investment.
Ends up paying interest on $1.1mil and is now effectively earning interest on his 'cash' of about 5.4% (the interest cost )
I use this method for all my spare cash and achieve maximum interest with no long term commitment as I can withdraw it at any time for new opportunities.
From your previous number you might be looking at a smaller investment but the theory is sound.
Cheers