Minimal Deposits - How investors successfully do this every time!

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Have you ever thought there is no way you could afford a property? What if you could buy a property for just a minimum deposit, how much of a difference could that make in your life. In this video, you'll learn how successful investors are able to do this every time.



Hi, I'm Phil Anderson from LifeCorp, the home of street smart property investors. Today, we're gonna have a look at one of my favorite strategies, the strategy of securing incredible properties in fantastic locations, great properties in hotspots around Australia, using just minimum deposits. Now, for many people, it all sounds too good to be true, and there's certainly no magic wand here. But you may be very surprised how easy it is to secure these properties using just a minimum deposit. Let's have a look at it together.

So how can you use a minimum deposit to secure a great investment property? Let's have a look at it together. It all starts with your family home, because this is how most people do this, this is how most people tap into existing equity using the equity and their ability to borrow more funds to be able to secure their next loan. Let's have a look at it together. If this is a family home situation- now, let's say this property is valued at about $650k. At $650k worth of value- now, don't worry too much about the numbers, I'll just try to make the numbers fairly easy for myself- $650k worth of value in this case, and, let's say, a $350k mortgage on that particular property. Now, if you wanted to use the equity inside of this property, of course, if it's valued at $650k, and you've only got a $350k mortgage, there's plenty of equity to use. If we decided we wanted to use this as security to buy an investment property, and let's say the investment property is valued at $350k- so a $350k investment property- and we're gonna get a full 100% loan. So, $350k worth of borrowing to secure that property. How does that work, and how can we use a minimum deposit?

Well, the way that the financiers all look of this- and I don't offer finance, I'm not involved in the area of finance, I certainly don't give any advice in that area, but I just want you to get an overview as to why many people who offer finance will be very comfortable with this scenario. Now, in this particular situation, what they will do is they'll look at the total value of these two properties and add them together. And, of course, in this situation, we've got a minimum million value across those two properties. They'll also look at what the total amount of lending needs to be, and in this case it's $700k. Now, what's gonna be very important is what we call a loan-to-value ratio, the LVR. The LVR scenario is how much percentage of borrowing do we need against the total value of the property. Now, in this particular situation, it's obviously about 70% LVR, loan-to-value ratio, making it a very comfortable scenario to use the equity in this particular property for most lenders, for most people who would offer the finance, to actually fully finance 100% of this property. Now, your accountant can make sure that this works out, that you're getting all the necessary tax benefits here and the financiers will understand this scenario, and there's many way to attack this, and I certainly, like I said, can't give specific advice on that. But, great brokers and people who are very involved in the area of finance will certainly make this a very simple and properly strategically worked out system to maximize their accounting side of things by buying this property. But, to exchange a contract on this $350k property, you could use a minimum deposit to totally control the deal.

So, that's how we use minimum deposits to shop nationally, looking around the whole of the national property market in Australia, looking at where the best strategic areas are to buy, and use minimum deposits to control the deal and make sure that we cap our holding costs and have fix price our contracts, and a whole range of other things that I teach inside of my program. But only using minimum deposits to secure the next property, making sure that as the fruit bears on this tree, as that property grows in value and it goes from a $350k property to a $500k property, it then itself has equity to use to go into the next property.

Guys, this is a very, very common and very utilized system that we're proving is very duplicatable around Australia. But that's how minimum deposits work. Now, just remember guys, in this whole process, the most important thing is, when you buy this property, you do the numbers first. Is it gonna be a lunch money property? Is the holding cost gonna be less than $20 a week? So, you're not just being able to use a minimum deposit, you're making sure that your holding costs are very, very low. Because like I always say, if you can't buy a property with your lunch money, don't buy it.


  1. Nathan Haynes says:

    HI Phil, Great video blog...just wondering; what if you don't have a PPR and/or no other properties. Can this strategy of $1 work?

    Cheers Nathan

    • I like to know about this too. Because me and my partner are first home buyer but haven't got it yet. We are trying to save money to get enough deposit and other costs but seems like there are more ways to get into the property market other than just saving money for the first home buyers. We are looking to buy a potential investment property to start with not the end of the line dream home. Thank you.

  2. Elizabeth says:

    I want to know more!

  3. great post!

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