If reporters could accurately predict market trends, they wouldn’t be reporters.

We [US based] have researched and monitored the New Zealand market for several years and consider it undervalued in most regions/sectors.

Although we do not invest in SFH’s, similar principles apply when evaluating property for acquisition or development. If your…[Read more]

10 percent is the down payment on an OTP [off-the-plan] residential property – held in a trust account and only refunded if the developer defaults under contract.

You must then secure the remaining 90 percent prior to settlement – which will likely require a 20 to 30 percent cash or other equity investment.

— Michael

In response to your answer, there are several important considerations including;

1. Debt to income ratio i.e. how much of your periodic income [monthly/annual] is paid out on living costs – will this increase your risk if you decide to incur more debt i.e. buy another house.

2. Your financial goals i.e. do you have an interest in creating…[Read more]

For further information re: foreign tax credits, the following links should lead you in the right direction.

http://www.taxpolicy.ird.govt.nz/international/DTA/roleofdta.html

http://www.ato.gov.au/corporate/content.asp?doc=/content/33873.htm

[Glen] Most institutional lenders [no matter what country] stipulate that the borrower must be a “permanent resident”…[Read more]

Option [ii] may work. However, issuing shares is not always the best option.

Consider what you want the company to achieve in the future, and not just this one project.

If the project is conducted under your company name and is a success, you have established “equity” in the brand [company name] which can have a value attached.

The more…[Read more]

[WP] What do you think of the basic premise of buying the asset in a company, and then allowing other investors to invest in the company?

— Before setting up a company with the intention of raising capital, put yourself in the prospective investors position.

Investors will focus on several qualifying factors, including; assets [not necessarily…[Read more]

AUSPROP – Yes I have heard (and tried) other marketeers that clainm they can achieve full value OTP and they have teh magic database and packaging etc. Having sold OTP and finished no one will ever persuade me that OTP achieves the same prices as a finished product.

MICHAEL – the valuation is dictated by location, competition in the marketplace,…[Read more]

With all due respect I disagree with most – if not all, of the above response.

“to sell off the plan you would need to offer some discount to their true value”

— Not necessarily. Supply and demand are two of the most important factors when evaluating an OTP development. Generally speaking, the project should not move forward if supply exceeds…[Read more]

RE: “I believe you can purchase residential property in NZ no problem but commercial property you have to own a company.”

My understanding is commercial property can be acquired and owned by an individual or registered entity in New Zealand, Australia and many other countries.

In terms of a foreign buyer seeking to acquire commercial or…[Read more]

The average foreign investor will find it difficult to secure a loan in the United States through conventional channels – without a resident status.

Foreign investors can acquire real estate in the United States i.e. via an equity loan in the investors country of origin, or with cash reserves.

Alternatively, foreign investors can establish a…[Read more]

Institutional lenders may finance an offshore investment if the loan is secured in Australia.

Likewise, if you intend financing a property in North America, the loan will need to be secured in North America – unless a freehold acquisition.

In terms of the United States, you generally require US residency or citizenship in order to acquire real…[Read more]

It would appear you intend selling the townhouses – with an estimated valuation of ~$1.3MM. Therefore, pre-sales [OTP = off the plans] may be an option to consider.

A personal guarantee is not necessarily required if selling OTP. In this case, primary lenders will often loan 70 percent [sometimes up to 80%] of the estimated valuation i.e. land +…[Read more]

If you are serious about attracting an investment partner, you first need to locate an appropriate site then conduct research and due diligence on a specific development type i.e. duplex, to determine feasibility.

From an investors perspective, an immediate red flag from your post is not having a site location, yet you know the financing target…[Read more]

“Is the use of negative gearing in a boom market a good way of raising capital for future ventures?”

– in order to raise venture capital, for real estate or otherwise, you must demonstrate 1. a well researched and risk adverse method of investment 2. a realistic ROR [rate of return] 3. an achieveable exit strategy. This could transpire through…[Read more]

It would appear you have made the right decision.

Take one step at a time. Once you gain further experience, and establish a trusted network, the larger projects will fall into place.

Although keep in mind, just because a project is considered “larger”, does not necessarily mean it will be more profitable.

— Michael

I wanted to add that the following statement is incorrect in terms of the point of discussion – unless you intend becoming an investment broker or a similar position which requires licensing.

“you are required to have an Australian financial services licence which allows you to deal in these particular financial products”

— Michael

I am not sure where the “$100K” fee to prepare a prospectus originated, when I have been quite clear on estimating the cost at between $20-50,000.

[WP] “my concept is that if I was able to have an ASIC registered prospectus, then I could then attempt to raise funds from there.”

Raising capital via a prospectus is not an easy or inexpensive task.…[Read more]

“What were you basing 100k on?”

I did not suggest the cost to produce a prospectus is $100K. But I can assure you anybody quoting $3-5,000 is not qualified to do so.

My feedback was..”In terms of cost, this can vary considerably, but a straight forward prospectus could range between $20,000-$50,000 – if prepared in the correct manner.”

“correct…[Read more]

“How do I ever know if I am dealing with a potential scammer???”

The decision to invest time and/or money into any “investment company” should involve the same due diligence as any other investment decision i.e. stock, bonds, property.

Request customer testimonials, a corporate history and information which details the “company’s” success rate -…[Read more]

The capitalization rate [or “cap rate”] is a ratio used to estimate the value of income producing properties.

Put simply, it is the net operating income divided by the sales price or value of a property expressed as a percentage.

Capitalization rates typically range from 8 to 12 for commercial and residential income properties. A high…[Read more]