I read Nathans newsletter. Whilst it's essentially correct, it barely scratches the surface.
Many lenders have a "Deferred Underwriting Authority" or DUA. This means that if your application falls under the parameters of that lenders DUA then the lender has the authority to approve the loan without having it reviewed by the mortgage insurer.
A serious property investor doesn't want the application to be reviewed by the mortgage insurer as this bring a whole new level of hurdles to jump over. Essentially if a borrower has a couple of million in existing loans, or they've got a large rental income, it's almost certain that the loan would be declined by the mortgage insurer even though the lender doesn't have an issue with it.
We've often seen cases where the deal gets declined at 90%. The borrower comes up with another 10% cash and it gets approved very easily at 80% by the same lender. Simply because at 80% the mortgage insurer isn't in the assessment process.
This means that if you can continuously make loan applications under a lenders DUA, you'll be able to borrow a lot more money. Unfortunately one of the DUA parameters is how much you've already borrowed with that lender.
As a result, the simple way around this is to use multiple lenders.
The challenge here is, not all lenders have a DUA and not all DUAs are equal. In most cases the people working at the bank don't even know the DUA parameters, nor do most brokers, simply because they don't deal with investors who try to push these boundaries.
One of my clients started by borrowing everything at 95%. Eventually we looked at the options and realized that he'd have to fall back to 90% lends. At this point he's managed to borrow about $4M and I think there's about another $1M that he can borrow before he has to go to 80%. We're also at the point however, that with every purchase he's got a contingency to complete the purchase at 80% LVR.
You can go a long way borrowing 90%, much further than Nathans email suggests, but at some point you run out of options and then have to fall back to 80%. How far you go depends on how well you understand lenders criteria and the DUA criteria, and how skillfully you can navigate through, around and between lenders.