What is the general strategy when obtaining a loan if you already have property? Do you borrow say 80% LVR on the new IP? Or do you lump the loan all in together? (is this called XCOLL?)
Thanks Rick, Rolf & Aaron,
All very clear.
So now, as I understand the PIA software, each property has its own equation, which may or may not show the required 25% equity needed to invest in IP #2 ??
So therefore each loan needs to have some sort of continual redraw facility?
Rick,You borrow 20% for the deposit plus another 5% for purchasing costs secured against your existing property, then you borrow the other 80% of the purchase price secured against the new property.
Yes Xcol is when your lender take more than one title to secure a loan.
I read through your 'Blue Print' - very informative and inspiring. My question concerns:
"So in year 11 ( 10 years since your 1st Ip) you have 250K equity in IP1 you can draw out (up to 80%) Tax free to fund your lifestyle or invest with."
Does this mean you further borrow 250K to live on? How does that work? Wouldn't borrowing money to live on be troublesome?