Expert Advice with Cam McLellan 16/03/2016

Beware! The most cruel, evil, money sucking instrument known to the financial world walks among us!

People who know me understand that I don’t often stray from my core investment selection criteria.

Therefore when I pick a property to add to my portfolio the next thing I think about is the structure of my finance. The reason for this is that my finance structure affects my cash flow, and cash flow is the most important thing to account for as an investor.

As I always say, property investing is a business. I’m therefore well aware that as the world’s business owner’s wake up each morning and look across their bowls of cereal, just like me they are thinking about...

…cash flow.

This being the case, I can’t understand how we have been so easily infiltrated by the most cruel, evil money sucking instrument known to the financial world.

I’m talking about, credit cards.

As an investor it’s important that you understand, if you have a personal credit card, the banks reduce your debt to service ratio (DSR) considerably. This is because they deem you have the ability to draw on it to its maximum limit. The bank will then calculate that you’re paying the maximum monthly repayment and add this amount when they calculate your DSR.

This can have a huge impact when you are trying to get pre-approval for a loan.

I don’t have a personal credit card. Instead I use a debit card. If you have a credit card get rid of it.

Imagine if the bank was red, 10 feet tall with horns and a pointed tail. Well the credit card is the pitchfork in its hand.

A credit card is simply a short-term high-interest loan designed to take the maximum amount of money from your pocket in the shortest amount of time possible. Credit cards are marketed in a clever way that makes it sound logical to use them in day-to-day life.

Brokers get paid fees from the banks to organise credit cards for clients. So always specify that under no circumstances do you want a credit card. Cutting up your card is not good enough. You need to cancel cards with the bank.

Instead use a debit MasterCard or Visa debit card for your personal needs.

When buying investments, you need to first determine your borrowing capacity (BC). If you find you have enough for a deposit plus costs, it’s time to go investment shopping. If you’re still short and need more money, start saving or find some OPM to use. Once you determine your BC you know exactly how much you need to get started.

For an investor, getting started is the most important thing and ensure you understand all influencing factors when investing.


Director of OpenCorp, Cam McLellan is committed to sharing his passion and property investment knowledge with everyday Australians.

After thriving in the telecommunications, technology and recruitment sectors and making six BRW Lists in 8 years, alongside accomplished OpenCorp. entrepreneurs Matthew Lewison and Allister Lewison, founded OpenCorp eight years ago. Cam started investing in real estate at a young age and quickly mastered the art of building sustainable wealth. He has used the same wealth building strategy to develop a multi-million dollar business, sharing his knowledge and skill with ordinary Australians. Cam has personally bought, sold and developed numerous properties and has an extensive residential and commercial investment portfolio.

Read more Expert Advice from Cam here!

Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.