1. What am I investing in?
A 144 lot land subdivision in Rockbank, Victoria. Investors help finance it for a share of the development profits.
2. What are the risks?
Risk is different for everyone. The specific risks of this offer are outlined on pages 38-40 of the Offer Information Statement (OIS).
For some people, keeping cash at bank is more of a risk than investing in shares, as they cannot meet their financial goals with the returns that cash generates.
3. When do I get paid?
You get paid after the bank is paid and before the developer. You get paid second in the payout order.
4. Why would the developer not just go to the bank?
Banks only fund a portion of the total development cost. This investment forms part of the total finance required.
Banks will lend money if a portion of equity is provided. This opportunity is to raise that equity and give investors a return on the equity raised.
5. Is there a guarantee?
As with all investments, apart from cash at bank, there is no guarantee as every investment carries a certain level of risk, however, there are structures in place to mitigate the risks.
6. What experience does the developer have?
The development management team has over 60 years of combined experience in renovation and construction. We use a model of subcontracting the best companies for the job. Some of these are listed below and have the expertise to execute on the project outcomes:
- Welsh Group
- Winslow Constructors
- RPM Real Estate Group
7. How far from Melbourne is the development?
30km from the CBD in the western growth corridor.
8. The property market is not good, why would I invest?
There is a common misconception out in the market that the property market, as a whole, is bad. The truth is that there are pockets of performance.
Coupled with a longer timeframe to countercyclical property and lending cycles, we position the projects for maximum value. You cannot do this by beginning a project at the height of the market.
9. Prices are down in Melbourne, how does that affect my return?
A generalisation of the state of the market sells newspapers and advertising. We are creating a community in high demand and infill areas.
Pricing is down due to lending restrictions and not the demand for property. As lending restrictions unwind, demand will be positively impacted. We also have the benefit of a 24 month timeframe and the knowledge of how market cycles work.
Demand for First Home Buyers is still strong, as is that of small lots, which we have in our development, recently increasing our development yeild from 144 lots to 161 lots.