API Article Question

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?



Also, due to tax deductibility and interest savings, is it better to use a LOC for an IP deposit instead of offset cash?

 

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.

 

Thanks for the simple explanation @D.T.!