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API Article Question

Discussion in 'Property Finance' started by House, 20th Apr, 2016.

  1. House

    House Well-Known Member Premium Member

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    13th Sep, 2015
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    Location:
    Sydney
    Good morning all :)

    Just a question about a loan features article in Jan's API article below. Maybe it's too early for the brain but have read it a few times and it's still not making sense to me! Is the author assuming there's a $550k sitting in the offset used to acquire the IP for $50k?

    image.jpeg

    Also, due to tax deductibility and interest savings, is it better to use a LOC for an IP deposit instead of offset cash?
     
    Last edited: 20th Apr, 2016
  2. D.T.

    D.T. Adelaide Property Manager Business Member

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    Location:
    Adelaide, SA
    Yes, she's talking about buying new ppor though and keeping existing ppor as IP. You wouldn't do it that way if buying an IP.

    Always best to use OPM (other peoples money) and keep your own as a buffer. But, depends on whether it's a ppor or might become one in the future.

    When I bought my ppor in Perth, I knew it was going to become an IP (as planned to move to Adelaide) so Corey structured it in a way to allow for that.
     
    House likes this.
  3. House

    House Well-Known Member Premium Member

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    13th Sep, 2015
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    Location:
    Sydney
    Thanks for the simple explanation @D.T.!