Steve,
I had no intention of posting anything more on this discussion or argument (which ever one you and Benny prefer), however I believe in manning up where it is required. In this case, you are absolutely correct that in the US, the term Valuation and Appraisal can be one and the same…..this is not the same here in Australia where both terms have very different standings with respect to property values. For that I unreservedly apologise.

Due to the fund being managed here in Australia, led me to believe that you would refer to the same terms as used here in Australia and although I did look into that briefly, it would not have taken much to ascertain that the terms can be interchanged in the US by some further research. Yes, you obviously had tried to indicate that to me in previous posts so can understand your frustration with respect to that and an apology is warranted as far as I am concerned.

However, my main concern with the fund is still the reported increases in FMV on many of the properties in the fund, which I did not believe was based on true Valuations (in the Australian sense) from the information contained in the PDS and EOFY Reports….especially the reference to internal Director’s assessment. You have now stated that the fund is going above and beyond and having the Valuations/Appraisals done every 6 months. As I have said previously, kudos to you if that is what is occurring but I would imagine that is quite expensive to conduct on 6 monthly basis.

Are these Valuation/Appraisal reports supplied to the fund members for their own transparent analysis? There was no reference to any valuation reports in the EOFY webinar or on the funds website but this maybe something that is provided privately to fund members? Transparency here is the key and that is what I was hoping to have answered by members invested in the fund to address my concerns.

Now this really will be my last post on the matter (I thought the apology needed to be addressed) but I will check back and hope that my final questions listed above can be answered, which would more than likely address my main concern with the fund and its reported performance over the last 12 months.

Good luck with the fund and tackling the US market.

Steve,
I have nothing to defend or any agenda other than my concerns about the funds claims. I posted my concerns on another forum and was directed here as the best source of info. I was unable to view and/or post here without joining. I did so and posted my concerns from my very first post as it is the only reason I joined. I don’t think I could be any clearer or honest than that.

Your T&c’s didn’t state that I had to have previous history to post or that I had to use my real name (which is fairly standard for a forum)….yet you have stated that I clearly have an agenda to sow doubt. I think this is a massive assumption on your part however I do agree that people do join forums to simply stir the pot. I am not one of those people however you can make up your own mind. I only joined this forum to raise my concerns about this funds as was recommended and just because I don’t agree with everything you claim, the fund should be able to be discussed objectively but that doesn’t appear to be the case.

Now back to business I agree…..

Surely being a RE expert you are able to differentiate the difference between an Appraisal and a Valuation? You have consistently intermingled both terms as if they are one and the same. One has legal standing, must be done by a qualified valuer, is comprehensive and is required for financing etc. the other is a price guide that has no legal standing. Your PDS and financial report clearly states that “the fund has an internal Director’s valuation for determining the fair value at each reporting date”. Whether you choose to use an independent “Appraisal” company or not, the fund is clearly able to make an internal decision on FMV. This is fact as per your own funds documentation. If you are having paid independent Valuations done, then they represent “true” value and would be easily disclosed as a written report that would be provided for each property. I gather this would be a very expensive process to do regularly on all properties and I fully understand why the fund would choose to do this every 3 years or as required as stated in the PDS. You have stated this is done every 6 months. If you are going above and beyond your PDS with 6 month valuations….then kudos to you but that is not clearly documented in your reports. My concern after viewing your EOFY webinar and viewing the financial reports are that some of these appraisals that have been used for FMV calculations and hence fund performance seem too good to be true and subject to internal Director input. If they are genuine valuations then that would be a very different matter.

In the end, I have wasted far too much of my own time looking into your fund of which I have no financial interest in, even though I have other questions about the fund. Good luck and I hope the returns are realised as they are certainly well above average.

Now I am not exactly an expert in breaking down financial reports as such but the figures with this fund do not seem to stack up but I am happy to be corrected if I am off the mark…..
The FY14/15 Financial Report has a $3.78 Million profit before distributions and a $2.3 Million loss before distributions from the parent entity. That’s a $1.5 Million profit realised for the fund. Total Fees and Reimbursements were $3.64 Million for the year.
There was $4.7 Million paid out in distributions for the year at 8c per unit. Capital Growth was reported as 27.61c per unit reported as an overall increase of 34.12% after fees for FY14/15. Who is making a 34.12% return on their money after fees in this current economic climate? Those returns are amazing if the figures stack up.

The fund has reported Total Net Assets of $82.3 Million as at 30 June 15 with just over 66 Million units on offer……that seems to indicate a Unit Price of approx. $1.24. The performance data has the Unit Price at 1.3277 as at 30 June 15. Mind you a Unit Price of $1.24 is still an outstanding ROI if correct.

The properties acquired appear to be internal appraisals rather than independent valuations as the PDS states that properties will be independently valued every 3 years or earlier if required. When you watch the webinar, some of the properties are ‘appraised’ with a Fair Market Value of over 40% CG for the last 6 – 12 months! Those returns if realised, seem to be too good to be true.

For those that believe that FOREX has made the fund heaps of cash, the reported FOREX gains for FY14/15 were only $327,984 with an unrealised FOREX gain of just over $6 Million. Surely these unrealised FOREX gains will only hold up if the properties are sold at the prevailing exchange rate and would be a very tricky gain to rely on throughout the life of the fund.

I also not that the first ever redemption window from the fund was activated in Oct 2015 and the Unit Redemption price was $1.2889 (the Responsible Entity can also control how much redemption is allowed) and yet the buy in Unit Price was $1.4216? Surely the Oct 15 Unit Price had been calculated based on Total Net Assets and the Redemption Unit Price was not a 13c per unit discount?

Anyway, hopefully my figures are wrong and the fund is achieving these results because if correct, it must be one of the best performing asset classes out there but I am not convinced the numbers stack up. Happy to be proven wrong though……